4' - Manias, Panics, and Crashes

This text excerpts from the book Manias, Panics and Crashes by Charles Kindleberger, analyzing speculative manias, panics, and crashes. It examines numerous historical financial crises, exploring their common features and underlying causes, such as credit expansion and irrational exuberance. The author uses economic models, particularly Hyman Minsky's, to explain these events. Furthermore, the text discusses the role of governments and international organizations as lenders of last resort in mitigating crises and the ethical implications of such interventions. Finally, the role of fraud and swindles in exacerbating these events is analyzed, highlighting the interplay between market psychology and criminal activity. National differences in speculative behavior and the impact of financial innovation are also considered.

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