Stock Market Crashes and Speculative Manias

Stock Market Crashes and Speculative Manias

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This volume achieves a nice balance by wisely assembling opposing views, alternative methods, and background information, and by covering a broad range of times, places and markets. Its structure and organization encourage historical thinking, pushing the reader beyond the arguments of the individual articles. Charles W. Calomiris, Journal of Economic History This volume offers an authoritiative selection of the best published articles on the great speculative manias and stock market crashes, which highlights their important similarities. These phenomena disrupt the normal activities of investors who use financial markets to accumulate diversified portfolios of assets. The attraction of rapid capital gains entices the unwary to abandon their customary investments, exposing them to ruin when prices of hot new assets collapse. The mania for tulips in seventeenth century Holland and schemes to refinance government debt in eighteenth century France and Britain burned many investors and transformed financial markets. The volatile American stock market of the nineteenth century and bursting regional real estate bubbles brought down many financial institutions, threatening economic stability. The striking parallels between the stock market crashes of 1929 and 1987 raise basic questions about the stability of the capital markets. By examining whether these phenomena represent rational movements of the market or some mania or fad, these articles focus on the central policy question of whether these markets require regulation to serve the investing public.We now have a pattern in the evolution of prices of newly developed, fashionable tulip bulbs. The first bulbs, unique or in small supply, carry high prices. With time, the price declines rapidly either because of rapid reproduction of the newanbsp;...

Title:Stock Market Crashes and Speculative Manias
Author:Eugene Nelson White
Publisher:Edward Elgar Pub - 1996


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