The South Sea Bubble of 1720. An Analysis of the First Financial Bubble

Inhaltsverzeichnis (Table of Contents)

• Introduction
• Background
• Data
• Method
• Results and Discussion
• Conclusion
• References

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This paper aims to analyze the South Sea Bubble, a significant event in the history of financial markets, and determine whether it truly constituted a bubble. It utilizes a combined qualitative and quantitative approach to explore the event's historical background and its impact on the British economy, while employing econometric techniques to analyze the bubble's price behavior.

• The historical context of the South Sea Bubble and its consequences.
• The rationality behind the bubble and its impact on British finances.
• The analysis of price data for the South Sea Company and three contemporary companies using econometric techniques.
• The characteristics of the bubble's price behavior and comparison to modern bubbles.
• The significance of the South Sea Bubble as a historical event in the development of financial markets.

Zusammenfassung der Kapitel (Chapter Summaries)

• Introduction: Introduces the South Sea Bubble as a historical landmark in financial markets, highlighting its significance in the context of economic history and the debate surrounding its nature. The paper outlines its objectives and approach, emphasizing the need to understand the event's historical background and its price behavior through qualitative and quantitative analysis.
• Background: Provides a comprehensive overview of the historical context of the South Sea Bubble, focusing on the British government's financial situation in the early 18th century. It examines the role of large-scale wars in increasing public debt, the impact of debt on European economies, and the importance of financial innovation in managing debt.

Schlüsselwörter (Keywords)

The key focus of this paper lies in analyzing the South Sea Bubble through a historical lens and examining its price behavior through econometric analysis. The core themes include financial bubbles, historical context, public debt, financial innovation, British economic history, and econometric techniques.