Dollars and Jens
Saturday, February 04, 2012
Though it is always mentioned first among the list of obvious manias, no serious effort has ever been expended to investigate the market fundamentals that might have driven the tulip speculation. This paper compiles time series on individual tulip prices and examines market fundamentals potentially driving prices. Most of the "tulipmania" was not obvious madness. High but rapidly depreciating prices for rare bulbs is a typical pattern in the flower bulb industry. Only the last month of the speculation, during which common bulb prices increased rapidly and crashed, remains as a potential bubble.
Peter Garber's article was in the Journal of Political Economy in 1989, but I just learned about it. You'll need access to JSTOR to read the whole thing, which I haven't. On the other hand, This PDF in which Maurits van der Veen's explains his disagreement is accessible to the public.


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