Finance and the Revolution of 1848

           It is easy to think of economic and financial crises that have had stunning political consequences. Sometimes this goes so far as to turn normally arcane fiscal and monetary questions into objects of fierce public debate. The reverse can also happen. Political events can and have changed the context of economic and financial decision-making with

Bicycle Boom

           Excitement is present in all speculative manias. Sometimes this excitement has only financial origins but widespread financial speculation can spring from enthusiasm for technical innovations or trendy fashions, especially those with the broadest popular appeal and relevance. In the late 19th century, the bicycle industry was benefiting from both changes in technology and fashion and

Financial Crisis of AD 33

           In ancient Rome, lending was often secured by land, at least in the case of large loans to wealthy landowners. Naturally therefore, the credit and real estate markets were closely linked. These links could help propel large fortunes when times were good and could cause trouble when virtuous cycles gave way to spiraling losses, when

Argentina, Barings, and the Panic of 1890

           In search of higher returns elsewhere, European investors in the 19th century increasingly coveted the bonds of South American borrowers. In Argentina, foreign money helped finance national improvements and government deficits. Arranging much of this financing was one of the oldest London merchant banks, Barings Brothers & Co. When the boom years ended and the

Hamilton and the Panic of 1792

           In the early 1790s, the United States was still in the midst of its first presidential administration and still establishing new governing institutions. This process was interrupted briefly by a financial panic in 1792. In a country then just a few years old, expectations for a strong response might not have been high. However, the

The Great Kuwaiti Crash

           In 1982, the third largest stock market in the world crashed, losing 60% of its value over three months. This occurred not in America or Japan, but in Kuwait. The tiny Persian Gulf state of a million and a half people had become enriched by oil money which flooded into its financial sector from investors

The South Sea Bubble in Writing

           Perhaps one of history’s best-known financial bubbles was also among the first. The South Sea Bubble, which inflated and popped in 1720, was the product of the “Financial Revolution” which began in Britain in the late 17th century. The crash is at least familiar to many interested in the history of financial crises. For this,

Commercial Paper Crisis of 1763

           For as long as money can be borrowed short-term at a rate cheaper than it can be borrowed for longer, banks and borrowers will be incentivized to keep the duration of their liabilities short. While this is economically favorable in the short-run, it carries meaningful risks. Such a maturity mismatch has been the source of

England’s 15th Century Depression

           In the mid-15th century, the economy of late-medieval England took a turn for the worse. The result was decades of economic stagnation and a reversal of a paradigm that dated to the end of the Great Plague of the 1340s. To speak of economic recessions or depressions in a pre-modern period, especially those whose root

Tulip Mania

           In the 17th century, one of the first recorded speculative bubbles held Holland firmly in its grip and it involved one of the most unlikely of assets, not stocks or bonds or real estate, but tulip bulbs. Even more than the time and place, it is the asset involved that makes the tale of ‘tulip

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