| Though literatures related with financial innovations have become booming since early 1970's, little attention was paid to the systemic study about financial products innovations, and the process of financial products innovations has still been regarded as a "black box". From the emergence of money, financial products have been playing an important role in the economic stage of human beings for thousands years. During these periods, people create basic financial products such as bank deposit and loan contracts, insurance contracts, bonds and stocks, besides the form of money evolving from livestock to electronic money, and people also witness financial derivatives innovated at an astonishing pace now a days. In this thesis I want to establish a general theoretic framework, with a view to explain why financial products could evolute from a real simple jumping-off point, say money, to a very complex system which include a broad kinds of products such as money, basic financial products and financial derivatives. By this way we shed a fight on the black box of the process of financial products innovation.We put financial products in an economic structure with division of labor, and then discuss financial products in an evolutionary view, which is different from many researchers who merely care about modern financial innovation. In our opinions, any phenomenon of financial products innovations could neither be bitty nor be isolated. From an extended temporal view, financial product has its inherent logic in evolution, since the history of activities in financial products innovations is long and continuous, even as the economic history of human beings.Further more, we attach importance to theories on the division of labor, which emphasize on the transaction efficiency and the reliability of cooperation between typical economic individuals in a social structure with division of labor. Once people select specialization direction and then the way of cooperation under division of labor, the transaction costs and the reliability of cooperation become primary obstacles in economic development. Under the circumstance, people need to overcome these obstacles to enjoy benefits from division of labor. Obviously, it is necessary to introduce some arrangements to an economy with division of labor, to reduce the transaction costs and to improve the reliability of cooperation. We could see that financial contract is an elaborate arrangement meets all these requests, thus financial product innovation as well as financial product development indispensably become a part of the evolution of an economy with division of labor - on the one hand, division of labor determines the innovation and development of financial products, on the other hand, financial products innovations boost the evolution of division of labor. We establish a model of positive feedbacksystem to describe the interactive dynamic evolutionary process between division of labor and financial products innovations: firstly, money endogenously originated from the transaction activities between economic individuals in an economy with division of labor; then in a situation under improved level of division of labor, people do not feel cozy when they limited by local trade, basic financial products such as bank deposit and loan contracts, insurance contracts, bonds and stock emergent according to tine extended trade distance; when the market expands to global extent, financial derivatives come forth because of their special characteristics of transaction efficiency and risk sharing. The puzzle that financial products may innovate acceleratly in some historic periods received a rational explanation under the reason of the leap of division of labor. While we stress on the driving force of division of labor, we never ignore other factors such as institutional changes, knowledge accumulation, and technology progress, which also affect financial products innovations in some degree, but as we could see, these factors are intergrowths of division of labor.After expou...
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