‘The Greatest Bubble in History’: Stock Prices during the British Railway Mania

Gareth Campbell and John Turner ()

MPRA Paper from University Library of Munich, Germany

Abstract: Although the British Railway Mania has been described as one of the greatest bubbles in history, it has been largely neglected by academics. This paper attempts to redress this neglect by creating a daily stock price index for the 1843-50 period and by assessing the contribution of the many newly-created railways to the bubble-like pattern in stock prices. The paper then examines whether this bubble-like pattern was due to an increase in the stochastic discount factor arising from an increase in the probability of large-scale adoption of railway technology. We find little evidence to support this hypothesis.

Keywords: bubbles; financial crises; Railway Mania (search for similar items in EconPapers)
JEL-codes: G01 G11 G12 N23 (search for similar items in EconPapers)
Date: 2010-03-31
New Economics Papers: this item is included in nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:21820

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