Famous first bubbles : the fundamentals of early manias / Peter M. Garber.

Format:

Book

Author/Creator:

Garber, Peter M.

Language:

English

Subjects (All):

Speculation--History.

Speculation.

Tulip Mania, 1634-1637.

South Sea Bubble, Great Britain, 1720.

Compagnie des Indes--History.

Compagnie des Indes.

Law, John, 1671-1729.

Law, John.

Physical Description:

xi, 163 p. : ill., map.

Edition:

1st ed.

Place of Publication:

Cambridge, Mass. : MIT Press, c2000.

Language Note:

English

Summary:

The jargon of economics and finance contains numerous colorful 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 eighteenth-century bulbs to that of seventeenth-century bulbs, he concludes that the extremely high prices for rare bulbs and their rapid decline reflects normal pricing behavior. 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.

Contents:

Intro

The Fundamentals of Early Manias

Contents

Preface

The Bubble Interpretation

The Tulipmania Legend

A Political and Economic Background

The Traditional Image of Tulipmania

Where Does the Tulipmania Legend Come From?

Establishment Attitudes toward Futures Markets and Short Selling: The Source of the Pamphlets

The Bubonic Plague

The Broken Tulip

The Bulb Market, 1634Ò 1637

Some Characterization of the Data

Post-Collapse Tulip Prices

Bulb Prices in Later Centuries

Was This Episode a ÏTulipmaniaÓ?

The Macro Bubbles

A Preliminary View: The Mississippi and South Sea Bubbles

John Law and the Fundamentals of the Mississippi and South Sea Bubbles

John LawÌs Finance Operations

A Rehash of Mississippi Market Fundamentals

LawÌs Shadow: The South Sea Bubble

South Sea Finance Operations

Fundamentals of the South Sea Company

Conclusion

Appendix 1 The Tulipmania in the Popular and Economics Literature

Appendix 2 The Seventeenth-Century Tulip Price Data

Notes

References

Index.

Notes:

Title from title screen.

Digitized and made available by: Books 24x7.com.

OCLC-licensed vendor bibliographic record.

Includes bibliographical references (p. [149]-153) and index.

ISBN:

0-262-27349-7

0-585-44652-0

OCLC:

52290440