Recessions: 1700′s style

I’m getting a genuine kick out of learning about the National Bureau of Economic Research which recently posted this article about the first financial bubble occurring in Paris, London and the Netherlands in 1720. Nice. Who knew there were financial bubbles back then; I figured it was mostly horses and buggies and people playing fiddle for the first time. From their blurb: Explanations for these linked bubbles primarily focus on the irrationality of investor speculation and the corresponding stock price behavior of two large firms: the South Sea Company in Great Britain and the Mississippi Company in France. Makes you wonder if stress surrounding this bubble indirectly led to outbreaks of violence in the French & Indian War in North America in the 1750′s. Or even the creation of artificial demand for an early form of Tazo tea.