This is an excerpt from the 4-volume dictionary of economics, a reference book which aims to define the subject of economics today. 1300 subject entries in the complete work cover the broad themes of economic theory. This extract concentrates on finance. Over recent decades, the study of finance has demonstrated a growing unity between theory and practice. Subjects such as corporate finance and stock markets, once approached by business specialists in mainly descriptive terms are now a branch of applied economics that uses theory to understand the real workings of financial markets. The resulting insights, demonstrated in these essays, bridge the economics faculty and the business school.