Frehen R., Goetzmann W. and Rouwenhorst G. (2009) Why invest in the bubbles?

August 31, 2009

Frehen, Rik, William Goetzmann and Geert Rouwenhorst (2009) “New Evidence on the First Financial Bubbles”, Yale international Center for Finance, Working Paper 04, 24p.

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This article is available online.

Why did investors decide to bet on the various companies that would form the three 1720 bubbles in France, England and the Netherlands? (p.1). How did these bubbles affect companies which unlike the Compagnie des Indes and the South Sea Company were neither involved in the Atlantic trade nor in public finance?

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Industrial production

August 31, 2009

As usual Rebecca Wilder of News N Economics has some seriously good charts and smart comments.

ip_chart2[1]


This week in Economic History (August 31-September 5, 2009)

August 31, 2009

From August the 31st to September the 4th, there will be a Summer University in Greece on History, Philosophy and Economic Thought.

From Wednesday to Friday, the 41st UK History of Economic Thought Conference will take place at the University of Manchester.You can contact Terry Peach for more information.

The 8th Conference of the European Historical Economics Society will take place on Friday the 4th and Saturday the 5th. The Conference is organized by the European Historical Economics Society, and is chaired by Marc Flandreau in the Graduate Institute of International and Development Studies, in Switzerland.

And well, on to some personal advertising. On Saturday the 5th (a day after my 25th birthday!), a TV show where I participated, Expedición 1808, will air in the National Geographic Channel in Latin America. Expedición 1808 is a “one-of-its-kind show, following the journey [expedición] of seven Mexico City youngsters in seven Hispanic American countries, to determine the path and relevance of ideas that gave birth to the independence wars of the 19th century” [taken from the press brief].

Out of the official aim of the show, I will talk about some aspects of economics and economic history: from sugar production nearby Caracas to smuggling and free trade inValparaíso, then and now… Here’s an advance of the show.

Stay tuned for news on web broadcasts…


Saint Catherine of the week

August 30, 2009

Martyrdom of St Catherine by Fernando Gallego

Martyrdom of St Catherine by Fernando Gallego

The quality of the image is not excellent but it is interesting to see a Spanish painting for once.


Webography

August 30, 2009

I don’t have access to any meaningful internet connection for a little while so very light blogging. However in conjunction with the absolutely fantastic article of Marc Flandreau et al. summarized below (by far the best I’ve read on the matter so far, sorry Oscar) I’d like to add a few links about early bubbles:

Harvard University has been digitilizing tens of images related to the South Sea Bubble. It is really worth checking out this site, if anything because they have beautiful and hilarious illustrations (here an article summing up the matter).

Harvard has also put online two books about the matter: one by Cole Arthur and one by John Sperling.

The great blog BibliOdyssey also has several engravings coming from the collection know as the Great Mirror of Folly.

Of course the Cato Institute also has an article on the matter.

Our dear friend Andrea Matranga also has an unfinished paper on the Tulipmania.

That’s all for now but more to come


Flandreau M. et al. (2009) The question was not how to develop finance

August 30, 2009

Flandreau, Marc, Christophe Galimard, Clemens Jobst and Pilar Nogués-Marco (2009) “The bell-jar: commercial interest rates betwee two revolutions” in The Origin and Development of Financial Markets and Institutions. From the Seventeenth Century to the Present, eds. Jeremy Atack and Larry Neal, Cambridge: Cambridge University Press, 161-208.

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An earlier version of this paper is available here.

For institutionalist economists as well as for contemporary commentators, the wealth of nations in 18th century Europe was rooted in their political system which influenced the level of interest rates and thus trade (p.165). The confidence investors had in the government’s credit was thus seen as critical (tellingly John Law’s primary aim was to bring interest rates down; p.166). Read the rest of this entry »


On [growing] American inequality

August 24, 2009

How much household income has received the top 0.01% of Americans since 1913?
Here‘s a graph in Paul Krugman’s blog showing it.

The richest 0.01% individuals in America and their income

The richest 0.01% individuals in America and their income

The graph was made with the tables and figures updated to 2007 prepared by Emmanuel Saez, Professor of Economics at the University of California at Berkeley and the most recent winner of the John Bates Clark medal.
Read the rest of this entry »