Famous First Bubbles: The Fundamentals of Early Manias

Garber, Peter M.

Were the tulip, Mississippi and South Sea bubbles really crowd madness, or can economics explain them?

At a glance

You will pause before calling a price surge madness and check the economics first
You will see that a famous story can rest on a single source with its own motives
You will weigh the case that two famous bubbles were government debt for equity swaps

Preface
I: The Bubble Interpretation
II: The Tulipmania Legend
1 A Political and Economic Background
2 The Traditional Image of Tulipmania
3 Where Does the Tulipmania Legend Come From?
4 Establishment Attitudes toward Futures Markets and Short Selling: The Source of the Pamphlets
5 The Bubonic Plague
6 The Broken Tulip
7 The Bulb Market, 1634–1637
8 Some Characterization of the Data
9 Post-Collapse Tulip Prices
10 Bulb Prices in Later Centuries
11 Was This Episode a “Tulipmania”?
III: The Macro Bubbles
12 A Preliminary View: The Mississippi and South Sea Bubbles
13 John Law and the Fundamentals of the Mississippi and South Sea Bubbles
14 John Law’s Finance Operations
15 A Rehash of Mississippi Market Fundamentals
16 Law’s Shadow: The South Sea Bubble
17 South Sea Finance Operations
18 Fundamentals of the South Sea Company
19 Conclusion
Appendix 1: The Tulipmania in the Popular and Economics Literature
Appendix 2: The Seventeenth-Century Tulip Price Data
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