Seminar paper from the year 2022 in the subject Economics - Finance, grade: 1,3, University of Münster, language: English, abstract: This paper analyses how far the events of 1720 actually constituted a bubble. While there is an ongoing discussion of what a "bubble" actually is, this study will sidestep much of the formal discussion and focus more on presenting stylised facts that any theory would need to be able to explain. Consequently, this paper will follow Quinn and Turner (2020) in defining a "bubble" as having two parts: a period of sharply increasing prices followed by a period of sharply decreasing prices. This definition has the advantage of not hinging on the cause of the bubble itself but focusing on the actual price developments (more on that later). While these price increases may carry the innuendo of not being justified by “fundamentals”, the definition does not explicitly require this. From the first international collapse of financial markets in the early 18th century to the more recent Great Financial Crisis, financial bubbles have been the source of massive economic gains as well as losses and bear an unrivalled potential to disrupt real economic activity. Consequently, they are often controversially discussed – both in the general public, as well as in academic literature. With every new supposed bubble episode, comparisons to past crises are drawn. While much of their original context got lost to the history books, a sense of awe regarding the madness that the participants seem to have suffered from remains. Even after 300 years, the events surrounding the South Sea Bubble of 1720 are still part of a controversial debate about the very nature of financial markets and the investors participating in them. As pointed out by Paul (2011), the South Sea Bubble "has become a byword for folly and fraud" and a landmark in the economic history of Europe. A company that survived for over one and a half centuries is today mostly remembered for what happened to it in less than a year. As one of the most famous crashes in history, its name is often invoked in debates of more recent bubbles – often with little understanding of the actual events.

Volume I contains original biographical profiles of many of the most important and influential economists from the seventeenth century to the present day. These inform the reader about their lives, works and impact on the further development of the discipline. The emphasis is on their lasting contributions to our understanding of the complex system known as the economy. The entries also shed light on the means and ways in which the functioning of this system can be improved and its dysfunction reduced.

In late September 1720 the South Sea bubble burst. The collapse of the South Sea Company's share price caused the first great British stock market crash, the repercussions of which were felt far beyond the City of London. Patrick Walsh's book traces for the first time the impact of the rise and fall of the South Sea bubble on the peripheries of the British state. Its primary focus is on Ireland, but Irish developments are placed within a comparative context, with special attention paid to Scotland. Drawing on an impressive array of evidence, including bank ledgers, private correspondence, pamphlets, newspapers, and contemporary literary sources, this book examines not only investment in London but also the impact of the bubble on the fate of non-metropolitan projects in the 'South Sea Year', notably the failed project for an Irish national bank. Central to the book is the lived experience of the bubble and the wider financial revolution. The stories of individual investors - their strategies, speculations, aspirations, gains, losses and misunderstandings - are employed to create a new, more personal narrative of the momentous events of 1720, showing how they impacted on the lives of the inhabitants of early eighteenth-century Britain and Ireland. Patrick Walsh is Irish Research Council CARA Postdoctoral Fellow at University College Dublin. He is the author of The Making of the Irish Protestant Ascendancy: The Life of William Conolly, 1662-1729 (Boydell Press, 2010).

Understanding the corporation means understanding its legal framework, but until recently the origins and evolution of corporate law have received relatively little attention. The topical chapters featured in this Research Handbook, contributed by leading scholars from around the world, examine the historical development of corporation and business organization law in the Americas, Europe, and Asia from the ancient world to modern times, providing an invaluable resource for both further historical research and scholars seeking the origins of present-day issues.

This book combines lessons and insights from financial theory with qualitative evidence, showing how the Georgians actually behaved and explaining why a bubble could occur without a gambling mania being to blame.

Few financial crises, historically speaking, have attracted such attention as the Mississippi and South Sea Bubbles of 1719–20. The twin bubbles had major economic and political implications, sending shock waves through the whole of Europe; they astonished contemporaries, and, to a large extent, they still resonate today. This volume offers new readings of these events, drawing on fresh research and new evidence that challenge traditional interpretations. The chapters engage, in particular, with: the geographical frame of the 1719-20 bubbles their social, cultural, economic and political impact the ways in which contemporaries understood speculation the contributions and impact of a diverse array of participants popular and print memorialization of the events Overall, the volume helps to rewrite the history of the 1719–20 bubbles and to recontextualize their place within eighteenth-century history.

Leading historians examine how financial innovations have challenged established institutional arrangements from the seventeenth century to the present.

For nearly three centuries the spectacular rise and fall of the South Sea Company has gripped the public imagination as the most graphic warning to investors of the dangers of unbridled speculation. Yet history repeats itself and the same elemental forces that drove up the price of South Sea shares to dizzying heights in 1720 have in recent years produced the global crash of 1987, the Japanese stock market bubble of the 1980s/90s, and the international dot.com boom of the 1990s. The First Crash throws light on the current debate about investor rationality by re-examining the story of the South Sea Bubble from the standpoint of investors and commentators during and preceding the fateful Bubble year. In absorbing prose, Richard Dale describes the trading techniques of London's Exchange Alley (which included 'modern' transactions such as derivatives) and uses new data, as well as the hitherto neglected writings of a brilliant contemporary financial analyst, to show how investors lost their bearings during the Bubble period in much the same way as during the dot.com boom. The events of 1720, as presented here, offer insights into the nature of financial markets that, being independent of place and time, deserve to be considered by today's investors everywhere. This book is therefore aimed at all those with an interest in the behavior of stock markets.

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.

Publishes general papers and a section on English politeness: conduct, social rank and moral virtue.