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Famous First Bubbles : The Fundamentals of Early Manias - Peter M. Garber

Famous First Bubbles

The Fundamentals of Early Manias

Paperback Published: 24th August 2001
ISBN: 9780262571531
Number Of Pages: 175
For Ages: 18+ years old

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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.

Industry Reviews

"[Peter Garber] lays out his argument with an engaging whiff of irony. It is an argument especially worth noting as high-tech portfolios continue to slide." - Steffan Heuer, Industry Standard

Prefacep. ix
The Bubble Interpretationp. 1
The Tulipmania Legendp. 15
A Political and Economic Backgroundp. 19
The Traditional Image of Tulipmaniap. 25
Where Does the Tulipmania Legend Come From?p. 29
Establishment Attitudes toward Futures Markets and Short Selling: The Source of the Pamphletsp. 33
The Bubonic Plaguep. 37
The Broken Tulipp. 39
The Bulb Market, 1634-1637p. 43
Some Characterization of the Datap. 49
Post-Collapse Tulip Pricesp. 61
Bulb Prices in Later Centuriesp. 65
Was This Episode a "Tulipmania"?p. 75
The Macro Bubblesp. 85
A Preliminary View: The Mississippi and South Sea Bubblesp. 87
John Law and the Fundamentals of the Mississippi and South Sea Bubblesp. 91
John Law's Finance Operationsp. 95
A Rehash of Mississippi Market Fundamentalsp. 105
Law's Shadow: The South Sea Bubblep. 109
South Sea Finance Operationsp. 115
Fundamentals of the South Sea Companyp. 121
Conclusionp. 123
The Tulipmania in the Popular and Economics Literaturep. 127
The Seventeenth-Century Tulip Price Datap. 133
Notesp. 145
Referencesp. 149
Indexp. 155
Table of Contents provided by Syndetics. All Rights Reserved.

ISBN: 9780262571531
ISBN-10: 0262571536
Series: Famous First Bubbles
Audience: Professional
For Ages: 18+ years old
Format: Paperback
Language: English
Number Of Pages: 175
Published: 24th August 2001
Publisher: MIT Press Ltd
Country of Publication: US
Dimensions (cm): 20.3 x 13.7  x 0.6
Weight (kg): 0.2