Cite
[1] P. M. Garber, «Tulipmania», Journal of Political Economy, vol. 97, fasc. 3, pp. 535–560, 1989.
Synthesis
Contribution::
Strong Points::
Weak Points::
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Metadata
FirstAuthor:: Garber, Peter M.
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Title:: Tulipmania
Year:: 1989
Citekey:: garberTulipmania1989
itemType:: journalArticle
Journal:: Journal of Political Economy
Volume:: 97
Issue:: 3
Pages:: 535-560
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Abstract
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. .
Notes
High prices and recorded trading occurred only for the rare bulbs. Common bulbs began figuring only in November 1636.
The tulip speculation collapsed after the first week of February 1637. Even starting in January 1637, before the peak, the price decline is remarkable. Prices fall to levels of 1 percent to 0.005 percent of their January 1637 values in a century.
There was no proved economic distress since the longer-term price rise occured only in the rare bulbs so no significant agricultural resources were devoted to expand their cultivation.
Traditional image
Tulip originated in Turkey but diffused in Western Europe in the middle of the sixteenth century. Accepted by the wealthy as a beautiful and rare flower. Market was for durable bulbs, not flowers. From 1634, nonprofessionals entered the tulip trade and the price skyrocketed to a maximum of 5500 guilders (50000 us dollars).
(speculation) large amounts of foreign funds entered the country to add to the speculation and people from all classes liquidated other assets to participate Finally, the frenzy terminated.
This version (viene da una catena di sentito dire) which originates from the Gaergoedt and Waermondt dialogues..