A Minsky Bubble? Economic Growth and the Financial Sector in 1763–72
An investigation on whether economic growth and financial activity in 1763–72 were such as to give rise to a Minsky bubble as per the well-known narrative of financial crises given by Charles Kindleberger. There is no evidence of a growth spike in the economy, of the equity and banking capital supplied to business, or of paper money that could justify a Minsky bubble. The one allegation in the traditional account that has some credibility is that of dubious practices in the money markets, most notably the ‘swivelling’ of bills of exchange. Even so, a bubble was unlikely to grow there due to the small size of the market and the pivotal importance of a conservative BOE discount policy.