Famous first bubbles: the fundamentals of early manias

Its thesis is that calling a sharp financial expansion that collapses a "mania" or "bubble" is sloppy thinking.Behind each upset lie some fundamental conditions.Even if historical contemporaries call an episode a mania or bubble, good economic historians should probe more deeply and determine what fundamental brought it on.They should stay clear of expressions like mania, bubble, herd behavior, panic, crash, irrational exuberance, financial crisis, chain letter, Ponzi scheme, contagion and "otherfool theory."Instead, they should dig.Peter Garber focuses on three episodes: the Dutch tulipmania of 1634-37 (one word in his lexicon) and the Mississippi and South Sea "bubbles" of 1719-1720.The tulipmania, on which he has written before, takes eighty-three pages of text, compared with thirty-five for both Mississippi and South Sea.The tulip fundamental is that rare If there is additional discussion of this review, you may access it through the network, at