Historical Returns | Financial Bubbles

Further Reading

This list provides information and introductory resources on the background and context of the topics presented in the Financial Bubbles capsule.

South Sea Bubble

The King, the Crook, and the Gambler: The True Story of the South Sea Bubble and the Greatest Financial Scandal in History
Malcolm Balen, Harper Collins, 2004
Reveals the true story of how a simple stock-share scheme became a Dickensian web of political and financial intrigue that threatened to overturn two monarchies and topple the British government. buy this book
The South Sea Bubble
John Carswell, Cresset Press, 1960
Provides an understanding of how the fraud worked, while capturing the big picture of British politics and society, and the fascinating personalities of the main actors in the government and the South Sea Company. buy this book
The First Crash: Lessons from the South Sea Bubble
Richard Dale, Princeton University Press, 2004
Describes the path of events that led to the collapse of shares in the infamous South Sea Company in 1720. buy this book
A Conspiracy of Paper: a Novel
David Liss, Random House, 2000
Historical fiction based in London featuring the character Benjamin Weaver who becomes involved in the shady South Sea Company. buy this book
Voyage to Cacklogallinia
Captain Samuel Brunt, J.Watson Printers, 1727
Anonymous satire, sometimes attributed to Jonathan Swift or Daniel Defoe, reflecting on the economic conditions of the early eighteenth century, with particular attention to the South Sea Bubble.
"Riding the South Sea Bubble" (PDF file)
Peter Temin and Hans-Joachim Voth, The American Economic Review, Volume 94, Number 5, December 2004, pp. 1654-1668(15).
A research paper demonstrating that predictable investor sentiment can prevent attacks on a bubble; rational investors may attack only when some coordinating event promotes joint action.
"Financial Markets Can Go Mad: Evidence of Irrational Behaviour during the South Sea Bubble"
Richard Dale, Johnnie V. Johnson, Leilei Tang, Economic History Review, Vol. 58, No. 2, pp. 233-271, May 2005
A paper exploring investor behavior during the South Sea Bubble. The implications of these findings for the current debate on rationality in financial markets are identified.
"Financial Market Analysis Can Go Mad (in the search for irrational behaviour during the South Sea Bubble)" (PDF File)
Gary S. Shea, Centre for Dynamic Macroeconomic Analysis, University of St. Andrews, Working Paper Series 0508, July 2005.
A paper examining eighteenth-century subscription financing for the South Sea Company, which challenges the conclusions of Dale, Johnson, and Tang (see above) concerning irrational investor behavior in the bubble.

Dot Com Bubble

The Boom and the Bubble: The U.S. in the World Economy
Robert Brenner, Verso, 2002
A financial history and comprehensive account of the crisis gripping contemporary global capitalism. buy this book
Dot.con: The Greatest Story Ever Sold
John Cassidy, Harper Collins, 2002
A sweeping and definitive assessment of the stock market mania that swept this country in the late 1990s. buy this book
Origins of the Crash: the Great Bubble and its Undoing
Roger Lowenstein, Penguin Press, 2004
The story of the stock market crash of 2000 is traced from the doldrums of the 1970s through the raiders and junk bonds of the 1980s to the financial brave new world of the 1990s. buy this book
Bull! a History of the Boom, 1982-1999
Maggie Mahar, HarperBusiness, 2003
Offers a thorough and accessible history of the explosive 1982-1999 bull market that is illuminating as well as sobering from the current bear market perspective. buy this book
Buy, Lie, and Sell High: How Investors Lost out on Enron and the Internet Bubble
D. Quinn Mills, Financial Times Prentice Hall, 2002
HBS Professor D. Quinn Mills offers the first systematic analysis of both the Internet stock bubble and the Enron scandal. buy this book
Internet Bubble: the Inside Story on Why it Burst, and What You Can Do to Profit Now
Anthony B. Perkins and Michael C. Perkins, Harper Information, 2001
The Perkins brothers describe how they expect the Internet sector ultimately to recover—this time without the speculative frenzy—and provide performance data and guidelines for determining which companies are poised to rebound. buy this book
eBoys : the First Inside Account of Venture Capitalists at Work
Randall E. Stross, Ballantine Books, 2001
Tells the story of how a group of not-quite-middle-aged men came to make an investment that returned a Silicon Valley record of 100,000 percent. buy this book
Startup.com
A documentary following two friends as they soar and crash with the dot-com wave. buy this DVD
E-Dreams: the Wild Ride of Kozmo.com
C.A.V. Distribution, 2002
A documentary following the founders of Kozmo.com as they raise money and file for IPO prior to the market crash in April 2000. buy this DVD
Dot.Con
Frontline, PBS, 2002
A documentary that takes an inside look at the precipitous rise and fall of the Internet economy.

History of Financial Speculation

Devil Take the Hindmost: a History of Financial Speculation
Edward Chancellor, Farrar, Strauss, Giroux, 1999
Takes an entertaining, albeit sobering, look at the history of speculative manias and the mass delusion that surrounds them. buy this book
A Short History of Financial Euphoria
John Kenneth Galbraith, Whittle Books in Association with Viking, 1993
Examines reckless speculative episodes in American financial history. buy this book
Famous First Bubbles: the Fundamentals of Early Manias
Peter Garber, MIT Press, 2000
Debunks the myths surrounding tulip mania, as well as its sisters in mythology, the South Sea bubble and the Mississippi bubble. buy this book
Manias, Panics and Crashes: A History of Financial Crises
Charles P Kindleberger, Wiley & Sons, Fifth edition, 2005
A scholarly account of how mismanagement of money and credit has led to financial explosions over the centuries. buy this book
Memoirs of Extraordinary Popular Delusions and the Madness of Crowds Volume I and Volume II
Charles Mackay, Office of the National Illustrated Library, 1852. Second edition (first published in 1841)
Encompasses a broad range of manias and deceptions from haunted houses and the prophecies of Nostradamus to speculative excess. Buy Volume I Buy Volume II
The Rise of Financial Capitalism: International Capital Markets in the Age of Reason
Larry Neal, Cambridge University Press, 1990
Based on computer analysis of price quotes from the eighteenth-century financial press, this work reevaluates the evolution of financial markets. buy this book
Irrational Exuberance
Robert J. Shiller, Princeton University Press, Second edition, 2005
Presents quantitative data around the late 1990s stock-market run-up and adds data on real-estate price trends in the early 2000s. buy this book