An analytic treatment of the linear development of the electrothermal instability with boundary effects is presented. The plasma is assumed to be bounded in one direction only, namely between two parallel walls of finite separation lying parallel to the applied magnetic field. The procedure of the calculation is to Laplace transform the linear electrothermal equations in time, solve the resulting spatial differential equations under the appropriate boundary conditions, and then transform back into real time to obtain the development of a given initial perturbation. Two cases are considered, viz., continuous insulator walls, and infinitely finely segmented electrode walls. In general, an initially plane wave perturbation in the electron density is split into an infinite number of modes, of which usually only a finite number are unstable. As the Hall parameter increases, more and more modes are successively destabilized. However, the critical Hall parameter for destabilization of a given mode usually increases as the wavelength parallel to the walls increases, so that, at least for some geometries, long wavelength perturbations are more stable. In the case of segmented electrodes it may be possible to achieve enhanced stability for a given wavelength by adjusting the external circuitry.