Bubble, toil, and trouble

Ben Craig

Economic Commentary, 2003, issue Oct

Abstract: When people call the dot-com boom a bubble, they imply that investors based their decisions on something other than a good estimate of the future value of the assets theywere buying. But some economists say that is not likely because episodes like the dot-com bust show future value is not always easy to predict, especially when the asset is a new technology. This Commentary shows how both explanations can describe a famous historical bubble that occurred after the introduction of a technology that was new at the beginning of the eighteenth century?a novel macroeconomic theory.

Keywords: Law, John; Speculation; Financial crises (search for similar items in EconPapers)
Date: 2003
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