LE CRISI FINANZIARIE DALLA TULIPANOMANIA ALLA BOLLA DEL 1987: LEZIONI DALLA STORIA

Abstract

Human behavior played a crucial role in the evolution of financial crises over modern and contemporary age. This chapter sets out to show how irrational action – from mania to panic, from euphoria to mass hysteria – represents a key factor in the bubbles from the tulipmania of 1637 to the 1987 stock market crash. From the point of view of what really happened during the crises, investors’ rationality appears an a priori belief about the way the world should work rather than a true description of the way the world has actually worked. Indeed, the prevailing model of financial crises entails the boom and the ensuing bust and is based on the episodic nature of the manias and the subsequent crises. Hence, the lesson is that even if we can’t prevent someone to make a foolish of himself, the historical understanding of financial crises teaches as that it is a possible to avoid that speculative and fraudolent financial businesses ruin the less aware investors.