Perhaps the most peculiar feature of a financial bubble – one that Charles Kindleberger's classic work Manias, Panics and Crashes draws particular attention to – is the inability of those trapped inside it to grasp the seriousness of their predicament. They know in principle that bubbles exist, and they know that the financial crashes that result from them are capable of destroying individuals' wealth and entire economies. Yet whenever and wherever a bubble begins to form, we're told that this time things are different, that there are sound reasons to continue to invest and to presume that prices will continue to rise steadily forever.
Kindleberger's achievement is to use the critical thinking skill of evaluation to examine this strange mindset and the arguments advanced in support of it. He harshly judges the acceptability of the reasons used to create such arguments, and highlights the issues of relevance and adequacy that give us every reason to doubt them. Kindleberger also uses his powers of reasoning to effect an unusual achievement – writing a work soundly rooted in economics that nonetheless engages and convinces a non-specialist audience of the correctness of his arguments.
Table of Contents
Ways in to the text
Who was Charles P. Kindleberger?
What does Manias, Panics and Crashes say?
Why does Manias, Panics and Crashes matter?
Section 1: Influences
Module 1: The Author and the Historical Context
Module 2: Academic Context
Module 3: The Problem
Module 4: The Author's Contribution
Section 2: Ideas
Module 5: Main Ideas
Module 6: Secondary Ideas
Module 7: Achievement
Module 8: Place in the Author's Work
Section 3: Impact
Module 9: The First Responses
Module 10: The Evolving Debate
Module 11: Impact and Influence Today
Module 12: Where Next?
Glossary of Terms
People Mentioned in the Text