Theory of Stock Exchange Crashes
Crashes of stock exchanges, and speculative markets more generally, have occurred ever since trading securities and commodities has become an important activity. A historical example is the “tulipmania”, the rise and subsequent crash of prices for tulip bulbs on Dutch commodity markets in 1637 [206, 207], or the South Sea bubble in England, where Newton lost much of his fortune, cf. Chap. 1. Modern financial crashes are discussed below. Since in such events enormous fortunes are at stake, efforts towards an improved understanding are mandatory.
KeywordsInterest Rate Stock Index Asian Crisis Richter Scale Bear Market
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