tulipmania Concepts

Boom and Bust: A Global History of Financial Bubbles

by William Quinn and John D. Turner · 5 Aug 2020 · 297pp · 108,353 words

demonstrated the near universality of madness, he then had chapters on the South Sea 10 THE BUBBLE TRIANGLE Bubble, the Mississippi Bubble, and the Dutch Tulipmania, all of which argued that bubbles occur because of the psychological failings of investors. Mackay was not the ﬁrst to associate bubbles with madness and

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, aeroplanes and electriﬁcation in the 1920s and the Internet and telecommunications in the 1990s. Probably the most famous absentee from our study is the Dutch Tulipmania of 1636–7, which witnessed the rapid price appreciation of rare tulip bulbs in late 1636, followed by a 90 per cent depreciation in bulb

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exclusively conﬁned to a thinly traded commodity, with no associated promotion boom and negligible economic 13 BOOM AND BUST impact.40 In other words, the Tulipmania was too unremarkable to merit inclusion. Although the wild ﬂuctuations in price are striking, they are not unusual for markets in rare and unusual goods

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, particularly those predominantly used to signal status.41 In the case of the Tulipmania these ﬂuctuations were compounded by legal ambiguity over the status of futures contracts, suggesting that the price movements may have had a somewhat mundane explanation

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.42 The infamy of the Tulipmania is largely the fault of Charles Mackay.43 Mackay painted the picture of a society overcome with collective insanity on the subject of tulips, where

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contemporary pieces of propaganda criticising the trade in tulips.44 Very few of the claims Mackay makes can be substantiated. The popular narrative of the Tulipmania is thus largely ﬁctional, ‘based almost solely on propaganda, cited as if it were fact’.45 Indeed, for several episodes in this book we can

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et al., ‘Bubbles for Fama’. 39. See Posthumus, ‘The tulip mania’. 40. Goldgar, Tulipmania. 41. Garber, ‘Tulipmania’; Garber, Famous First Bubbles. 42. Thompson, ‘The tulipmania’. 43. Mackay, Memoirs of Extraordinary Popular Delusions, 2nd edition. 44. Goldgar, Tulipmania, p. 6. 45. Goldgar, Tulipmania, pp. 6–7. 46. Englund, ‘The Swedish banking crisis’; Moe, Solheim and Vale

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Economic Perspectives, 4, 35–54, 1990. Garber, P. M. Famous First Bubbles: The Fundamentals of Early Manias, Cambridge, MA: MIT Press, 2001. Garber, P. M. ‘Tulipmania’, Journal of Political Economy, 97, 535–60, 1989. García, D. ‘Sentiment during recessions’, Journal of Finance, 68, 1,267–300, 2013. Gayer, A. D., Rostow

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’, NBER Working Paper, No. 21693, 2015. Goetzmann, W. N. and Newman, F. ‘Securitization in the 1920’s’, NBER Working Paper, No. 15650, 2010. Goldgar, A. Tulipmania: Money, Honour, and Knowledge in the Dutch Golden Age, Chicago University Press, 2007. Gollan, R. The Commonwealth Bank of Australia: Origins and Early History, Canberra

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.poemhunter.com/poem/the-speculators, last accessed 30 August 2019. Thomas, W. A. The Provincial Stock Exchanges, London: Frank Cass, 1973. Thompson, E. A. ‘The tulipmania: fact or artifact?’, Public Choice, 130, 99–114, 2007. Tobin, J. ‘A proposal for international monetary reform’, Eastern Economic Journal, 4, 153–9, 1978. Tooke

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town- or village-owned enterprises, 195 transaction costs in relation to the 1920s stock market bubble, 128 in relation to the Dot-Com Bubble, 161 Tulipmania, 11, 13–14 underpricing in relation to the Dot-Com Bubble, 155 in relation to the Japanese bubbles, 142 unicorn bubble, the, 213 US housing

Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis

by Anatole Kaletsky · 22 Jun 2010 · 484pp · 136,735 words

boom-bust cycle in housing was essentially the same as the speculation in technology stocks in the 1990s, the Japanese bubble in the 1980s, and Tulipmania in seventeenth-century Holland. But why should we adopt either of these extreme views? Some features of human life do permanently change history, for example

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as the South Sea Bubble or the Lehman bankruptcy, every generation or two. These financial manias, going back even before the South Sea Bubble to Tulipmania in seventeenth-century Holland, often caused severe economic dislocations, especially in financially oriented countries. Such disruptions have usually been powerful enough to overwhelm, at least

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into long-term trends is as old as the history of capitalism. The most famous and preposterous examples of exaggerated misinterpretations of boom-bust cycles, Tulipmania and the South Sea Bubble, occurred at the very origin of the modern capitalist system. But the lessons that ought to be drawn from these

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the world economy have turned out to be more far-reaching than anyone in 1999 predicted. A broadly similar argument can even by made about Tulipmania and the South Sea Bubble. The purchase of a single tulip bulb for the price of a townhouse in Amsterdam, at that time the richest

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city in the world, seems like a symptom of certifiable madness, yet even this behavior appears less bizarre when placed in its historic context. Tulipmania marked the emergence of the first free-enterprise capitalist economy in history. In the early seventeenth century, during the Eighty Years’ War of 1568- 1648

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Las Vegas condominiums inevitably collapsed in 2007. But the bursting of the tulip bubble in 1637 did not end Dutch economic hegemony. Far from it. Tulipmania was followed by a century of Dutch leadership in almost every branch of global commerce, finance, and manufacturing. Holland’s global dominance continued until the

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-based South Sea Company, whose establishment in 1711 symbolized the emergence of England as the world’s dominant economic power. As in the case of Tulipmania, this structural transformation in economic conditions gave rise to an unsustainable financial boom, the South Sea Bubble. This bubble burst in 1720, exposing colossal fraud

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defense against the bubble’s devastation, as Newton discovered. The indiscriminate nature of its financial devastation may explain why the South Sea Bubble, along with Tulipmania, is usually considered the quintessential case of the financial markets’ detachment from reality, a view expressed in the title of probably the most famous book

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dominance, was scarcely a hiccup in the country’s rise to global financial power. Just as the Dutch financial system hardly missed a beat after Tulipmania and went on to dominate the world for the next century, the British economy quickly rebounded after the 1720 crash. The financial returns from trans

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See also Capitalism Market fundamentalism; Monetarism Theory of Moral Sentiments (Smith) Theory of Reflexivity Thrift paradox Tobin, James Toffler, Alvin Trillion Dollar Meltdown, The (Morris) Tulipmania/effects Turner, Adair Unemployment central bankers and demand management and labor unions and monetarists and “natural-rate hypothesis,” targeted levels Value chain Viniar, David Volcker

Manias, Panics and Crashes: A History of Financial Crises, Sixth Edition

by Kindleberger, Charles P. and Robert Z., Aliber · 9 Aug 2011

edition are the Kipper- und Wipperzeit, a monetary crisis (1619–22) that occurred at the outbreak of the Thirty Years War, and the much-discussed ‘tulipmania’ of 1636–37. The view that the trade in tulip bulbs in the Dutch Republic constituted a bubble followed from widespread recognition, even at the

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failure of these institutions disrupts the channels of credit and thus contributes to the slowdown in economic activity and the sluggishness in the economic recovery. Tulipmania The price of Dutch tulips increased by several hundred percent in the autumn of 1636 – and the increases in the prices of the more exotic

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one between Leiden and Delft. Building of the complex network reached a peak in 1659 and 1665, but de Vries connected the project to the tulipmania and to the explosive growth of the Dutch economy between 1622 and 1660.5 Jonathan Israel wrote that the

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tulipmania should be viewed against the background of the general boom and as a mania of ‘small-town dealers, tavern-keepers and horticulturalists’ while for the

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most part the wealthy made money in other ways.6 This perspective undermines one of Peter Garber’s points that there could have been no tulipmania because there was no depression once bulb prices declined.7 The Dutch economy slowed in the 1640s before putting on a tremendous growth spurt from

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contributed to the next wave. The increases in the supplies of credit generally were provided by banks. However, the buyers of bulbs during the Dutch ‘tulipmania’ of the 1630s could pay the increasingly high prices only because the sellers provided credit. As bulb prices increased, rational exuberance morphed into irrational exuberance

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, ‘The American Crisis of 1907’, in Papers in Current Finance (London: Macmillan, 1919), pp. 202–3. 6 Euphoria and Paper Wealth 1. Peter M. Garber, ‘Tulipmania’, in Robert P. Flood and Peter M. Garber, Speculative Bubbles, Speculative Attacks, and Policy Switching (Cambridge, Mass.: MIT Press, 1994), p. 72. 2. N.W

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Vries, Barges and Capitalism: Transportation in the Dutch Economy (Wageningen: A.G. Bidragen, 1978), pp. 52ff. 6. Israel, The Dutch Republic, p. 533. 7. Garber, ‘Tulipmania’, pp. 71–2. 8. Israel, The Dutch Republic, chap. 33. 9. Ibid., p. 869. 10. Homer Hoyt, One Hundred Years of Land Values in Chicago

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, 262 see also Long-Term Capital Management (US) Herstatt AG, Cologne 3, 251, 278 Holland (the Netherlands) 59, 62 1763 crisis 235 Amsterdam see Amsterdam tulipmania, 1636 11, 17, 59, 109–11 home-equity credit 68–9 Hong Kong 85, 178, 233 Hoover, Herbert 154, 167, 195–6 Howson, Susan 242

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hazard 270–2 Tooke, Thomas 92, 196 Transparency International (corruption index) 121 trekschuit 110–11 Trollope, Anthony 142, 152 Troubled Assets Relief Program (TARP) 267 tulipmania, 1636 17, 109–11, 273 Tyco 134, 141 Union Générale, Paris 74–7, 97, 142, 145, 155, 166, 218, 224 Union Pacific railroad 97, 139

Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond: The Innovative Investor's Guide to Bitcoin and Beyond

by Chris Burniske and Jack Tatar · 19 Oct 2017 · 416pp · 106,532 words

prestigious of assets. Unfortunately, when the market turns and the prestige is gone, the contagion of terror spreads just as quickly through the speculative crowd. Tulipmania The most famous instance of mass speculation in a commodity happened in the Dutch Republic in the 1630s. As with most periods of mass speculation

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mid-1500s, but it was not until 1634 and the spread of the virus that prices increased exponentially, causing what is commonly referred to as Tulipmania. What began with small groups of speculators turned into crowds of speculators, as outsiders from other countries were drawn to Dutch tulip markets upon hearing

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the winter of late 1636 and early 1637, when the tulip bulbs were still dormant in the ground. Therefore, the period of greatest speculation during Tulipmania was not accompanied by a single blossoming tulip changing hands.15 Two factors made the crowd speculation even worse. According to a study in The

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merchants were unscathed by the crash they precipitated. The crash did not set off a recession throughout the economy, which was one saving grace of Tulipmania. It was the common people, less experienced in investing, that had been swept up in the madness of the crowd who were the hardest hit

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of the most expensive tulip would still require a year’s work for some unlucky citizens. The Speculation of Crowds Comes to Cryptoassets As with Tulipmania, cryptoassets are vulnerable to the speculation of crowds. This is especially true as people fixate on the incredible returns some early bitcoin investors enjoyed and

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by stories of their friends and family making easy money, even when they knew little about what they bought. In times like these (as in Tulipmania), many subscribe to the “greater idiot” ideal: people can make money so long as they are able to sell the asset at a higher price

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, we’ll turn to these three themes in the next chapter. Chapter 11 “It’s Just a Ponzi Scheme, Isn’t It?” The example of Tulipmania and similar events should remind the innovative investor that bubbles can appear quickly and violently, especially in cryptoassets. These patterns have been repeated in bitcoin

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. To get an idea of what havoc misleading asset issuers can create, we’ll examine an example from early equities markets. About 80 years after Tulipmania, in the early 1700s, the first international bull market came to rise.16 Kick-started by infamous entities such as John Law’s Mississippi Company

Tulipomania: The Story of the World's Most Coveted Flower & the Extraordinary Passions It Aroused

by Mike Dash · 10 Feb 2010 · 263pp · 84,410 words

more recent and more analytical A. T. van Deursen, Plain Lives in a Golden Age (Cambridge: Cambridge University Press, 1991). Value of a tulip Garber, “Tulipmania,” p. 537n, states that in 1637 each guilder contained 0.856g of gold. One gram of gold was thus worth 1.17 guilders. A Viceroy

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5 fetched 146 guilders per gram, making it worth 125 times its weight in gold. Richest man Israel, Dutch Republic, p. 348. Tulip fortunes Garber, “Tulipmania,” p. 550. Chapter 2. The Valleys of Tien Shan The early history of the tulip is very largely obscure. Its Asian origins are discussed by

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and 1637,” in W. C. Scoville and J. C. LaForce, eds., The Economic Development of Western Europe, vol. 2 (Lexington, Mass., 1969), and Peter Garber, “Tulipmania,” Journal of Political Economy 97 (June 1989), pp. 535–60. Information on Dutch gardens of the period is drawn from Paul Zumthor, Daily Life in

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. 40 verso and 41; vol. 7, p. 111 and verso; vol. 9, p. 10. See also Krelage, Bloemenspeculatie in Nederland, pp. 32–33, 68; Garber, “Tulipmania,” p. 537; Segal, Tulips Portrayed, pp. 8–9. The ownership of Semper Augustus In recent years several authorities have confidently stated that the owner of

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, p. 92. Mackay tells the (unreferenced) story of the English traveler. Peter Garber has drawn attention to the fundamental implausibility of these anecdotes, see Garber, “Tulipmania,” p. 537 & n. Dutch recession Israel, Dutch Republic, pp. 314–15. Weavers Those who note the predominance of linen workers among the tulip maniacs include

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, pp. 97–110; Krelage, Drie Eeuwen Bloembollenexport, pp. 15–18; Segal, Tulips Portrayed, p. 17; Mundy, Travels of Peter Mundy, vol. 4, p. 75; Garber, “Tulipmania,” pp. 550–53. Aert Huybertsz. Posthumus, “Die Speculatie in Tulpen” (1927), pp. 82–83. Haarlem as the center of the later bulb trade Krelage, Bloemenspeculatie

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John Evelyn, II, Kalendarium, 1620–1649. Oxford: Clarendon Press, 1955. Fischer, Hans. Conrad Gesner, 1516–1565. Leben und Werk. Zürich: Leemann,1966. Garber, Peter M. “Tulipmania.” Journal of Political Economy 97 (June 1989):535–60. Gelder de Neufville, D. M. van. “De Oudste Generatics van het Geslacht de Neufville.” De Nederlansche

Smart Money: How High-Stakes Financial Innovation Is Reshaping Our WorldÑFor the Better

by Andrew Palmer · 13 Apr 2015 · 280pp · 79,029 words

to discourage Americans from investing in foreign securities; international firms turned to the nascent European market for dollar-denominated borrowing instead. Going further back, the “tulipmania” that infected seventeenth-century Dutch buyers, sending the price of tulip bulbs spiraling beyond the cost of a town house in Amsterdam, is usually put

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prices did not rise high enough to make it worthwhile exercising the option. Prices soared as a result. In the words of one scholar, the tulipmania was little more than a “contractual artifact.” The current burst of regulatory activity is bound to have similar unanticipated effects on how money moves around

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the shares of a company set up to exploit economic opportunities in what is now the United States. Before that there was the seventeenth-century “tulipmania” in Holland. The ancient world also had its share of financial panics. The Roman Empire endured a crisis in AD 33, when the enforcement of

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the proceedings of the Seventh Hellenic-European Conference on Computer Mathematics and Its Applications, 2005). 26. Morrison and Wilhelm, Investment Banking. 27. Earl Thompson, “The Tulipmania: Fact or Artifact?,” Public Choice 130, nos. 1–2 (2007). 28. S. H. Haber, “Industrial Concentration and the Capital Markets: A Comparative Study of Brazil

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pre-HFT era, 59–61 problems with, 56–58, 62–63 Hinrikus, Taavet, 190–191 HIV infection rates, SIB program for reduction of, 103 Holland, tulipmania in, 33, 36 Home equity, 139–140 Home-ownership rates, in United States, 85, 170 Homeless people, SIB program for, 96–97 Housing boom of

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Different (Reinhart and Rogoff), 35 Titmuss, Richard, 110 TransferWise, 190–192 Trente demoiselles de Genève, 22 True Link Financial, 144 Tufano, Peter, 59, 213–214 Tulipmania, 33, 36 Tversky, Amos, 137 UBS, 60 Uganda, social-impact bonds (SIBs) in, 103 Unbanked households, 200 United States aggregate value of property, 69 consumer

Lonely Planet Amsterdam

by Lonely Planet

learn how Ottoman merchants encountered the flowers in the Himalayan steppes and began commercial production in Turkey, how fortunes were made and lost during Dutch 'Tulipmania' in the 17th century, and how bulbs were used as food during WWII. You'll also discover present-day growing and harvesting techniques. There's

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city hardly went into decay or ruin, the embattled economy would take more than a century to regain its full strength. The Curious History of Tulipmania When it comes to investment frenzy, the Dutch tulip craze of 1636–37 ranks alongside the greatest economic booms and busts in history. Tulips originated

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World's first weekly broadsheet newspaper, the Courante uyt Italien, Duytslandt, &c., is printed in Amsterdam. Catholicism is outlawed, with clandestine worship permitted. 1636–37 Tulipmania sweeps the nation, when the flower bulbs are more valuable than a canal house. Tulip speculators get rich fast, but the market crashes and many

Willful: How We Choose What We Do

by Richard Robb · 12 Nov 2019 · 202pp · 58,823 words

up the price of tulips to incredible heights and causing an economic crisis when prices finally collapsed. According to Peter Garber’s 1989 article debunking tulipmania, modern references to the tulip craze are based on a brief description from 1852 that drew in turn on unreliable secondary sources. Garber’s investigation

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://pdfs.semanticscholar.org/36f1/2ace17c4cb86a086902d1ac27e475f8c945d.pdf (accessed February 2, 2019). ———. “A Theory of Intergenerational Altruism.” Econometrica 85, no. 4 (2017): 1175–1218. Garber, Peter M. “Tulipmania.” Journal of Political Economy 97, no. 3 (1989): 535–560. Gazzaniga, Michael S. The Ethical Brain: The Science of Our Moral Dilemmas. New York: Harper

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transaction costs, 64, 70, 78 transitivity of preferences, 158–159 Treatise of Human Nature (Hume), 209n5 “tricky profit,” 18–21 trolley problem, 133, 135–137 tulipmania, 212n1 Tversky, Amos, 168, 174 Twain, Mark, 60 ultimatum game, 107–108, 207 uncertainty, about future, 25, 153, 181–185 unique events, 70–71, 72

The Long Good Buy: Analysing Cycles in Markets

by Peter Oppenheimer · 3 May 2020 · 333pp · 76,990 words

be found in Chancellor, E. (2000). Devil take the hindmost: A history of financial speculation. New York, NY: Plume. 5 See Thompson, E. (2007). The tulipmania: Fact or artifact? Public Choice, 130(1–2), 99–114. 6 Evans, R. (2014). How (not) to invest like Sir Isaac Newton. The Telegraph [online

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-24775 Thaler, R. H., and Sunstein, C. R. (2008). Nudge: Improving decisions about health, wealth, and happiness. New York, NY: Penguin. Thompson, E. (2007). The tulipmania: Fact or artifact? Public Choice, 130(1–2), 99–114. Tooze, A. (2018). Crashed: How a decade of financial crises changed the world. London, UK

Irrational Exuberance: With a New Preface by the Author

by Robert J. Shiller · 15 Feb 2000 · 319pp · 106,772 words

NASDAQ, which is heavy on high-tech stocks, dropped 5.6% that day, representing its third largest percentage drop in ten years. 13. Peter Garber, “Tulipmania,” Journal of Political Economy, 97(3) (1989): 557. 14. Sanjoy Basu, “The Investment Performance of Common Stocks Relative to Their Price-Earnings Ratios: A Test

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Mifﬂin, 1961. Gale, William G., and John Sabelhaus. “Perspectives on the Household Saving Rate.” Brookings Papers on Economic Activity, 1 (1999): 181–224. Garber, Peter. “Tulipmania.” Journal of Political Economy, 97(3) (1989): 535–60. ———. Famous First Bubbles: The Fundamentals of Early Manias. Cambridge, Mass.: MIT Press, 2000. Geanakoplos, John. “Common