19 ms·

The historical view of tulip speculation has changed a lot in the last 20 years, but popular conception has not caught up. In a nutshell, it is now believed by

by _dps 8y ago

The historical view of tulip speculation has changed a lot in the last 20 years, but popular conception has not caught up. In a nutshell, it is now believed by several researchers to have been a very narrow phenomenon with minimal impact to the national economy. Per Wikipedia "While Mackay's account held that a wide array of society was involved in the tulip trade, Goldgar's study of archived contracts found that even at its peak the trade in tulips was conducted almost exclusively by merchants and skilled craftsmen who were wealthy, but not members of the nobility.[44] Any economic fallout from the bubble was very limited." https://en.wikipedia.org/wiki/Tulip_mania#Modern_views https://en.wikipedia.org/wiki/Tulip_mania#Modern_views Taken at face value, this suggests that the tulip "bubble" was dramatically different from either the dotcom or the mortgage bubble, which had wide ranging participation and damage. One could argue that the latter two would have been impossible without the Fed.

tabtab 8y ago
Economies ran slower in those days so it's hard to compare. But the principle of hype and me-too-ism was present in the Tulip incident even if it didn't spill over to other economic areas. Whether human nature breaks big gizmos or small gizmos, it's still human nature at play. The FED did not make people pay way too much for silly dot-coms. But bubbles continued. I wonder if one can make a case that pre-FED bubbles were notably smaller than post-FED bubbles, factoring in the fact that the nature of modern economies may magnify bubbles. In other words, if there is a continuous upward slope to the size of bubbles from the 1600's up to now, then it would appear FED made no significant difference. But if there is a spike or jump when FED formed, it could mean they magnify them.

19 ms·

The historical view of tulip speculation has changed a lot in the last 20 years, but popular conception has not caught up. In a nutshell, it is now believed by

by _dps 8y ago

tabtab 8y ago
Economies ran slower in those days so it's hard to compare. But the principle of hype and me-too-ism was present in the Tulip incident even if it didn't spill over to other economic areas. Whether human nature breaks big gizmos or small gizmos, it's still human nature at play. The FED did not make people pay way too much for silly dot-coms. But bubbles continued. I wonder if one can make a case that pre-FED bubbles were notably smaller than post-FED bubbles, factoring in the fact that the nature of modern economies may magnify bubbles. In other words, if there is a continuous upward slope to the size of bubbles from the 1600's up to now, then it would appear FED made no significant difference. But if there is a spike or jump when FED formed, it could mean they magnify them.