Famous First Bubbles

Famous First Bubbles The Fundamentals of Early Manias

Hardback (10 Jul 2000)

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Publisher's Synopsis

The jargon of economics and finance contains numerous colourful terms for market-asset prices at odds with any reasonable economic explanation. Examples include "bubble", "tulipmania", "chain letter", "Ponzi scheme", "panic", "crash", "herding" and "irrational exuberance". Although such a term suggests that an event is inexplicably crowd-driven, what it really means, claims Peter Garber, is that we have grasped a near-empty explanation rather than expend the effort to understand the event.;In this book Garber offers market-fundamental explanations for the three most famous bubbles: the Dutch Tulipmania (1634-1637), the Mississippi Bubble (1719-1720) and the closely connected South Sea Bubble (1720). He focuses most closely on the Tulipmania because it is the event that most modern observers view as clearly crazy. Comparing the pattern of price declines for initially rare 18th-century bulbs to that of 17th-century bulbs, he concludes that the extremely high prices for rare bulbs and their rapid decline reflects normal pricing behaviour. In the cases of the Mississippi and South Sea Bubbles, he describes the asset markets and financial manipulations involved in these episodes and casts them as market fundamentals.

Book information

ISBN: 9780262072045
Publisher: MIT
Imprint: The MIT Press
Pub date:
DEWEY: 332.6322809
DEWEY edition: 21
Number of pages: 176
Weight: 340g
Height: 203mm
Width: 144mm
Spine width: 20mm