Mississippi Bubble


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Mississippi Bubble

An 18th-century speculative bubble resulting from the Mississippi Company, which had a charter from the King of France for overseas trade with the Louisiana Territory and elsewhere. The Company's founder, John Law, promoted the trade of the stock, which was guaranteed indirectly by the King. The company issued notes (through the Banque Royale) until the government admitted it did not have sufficient coinage to cover the notes it had printed. This resulted in a bank run and the burst of the bubble in 1720. The Mississippi bubble was one of the first times a bank issued paper money.
References in periodicals archive ?
This Commentary explains the two schools of thought and shows how both can describe a famous historical episode known as the Mississippi bubble.
This Commentary explores both explanations in light of an alleged archetypal bubble, the so-called Mississippi bubble.
The history of the Mississippi bubble centers around the rise and fall of John Law, a gentleman who could be described as one of the very first macroeconomists.
The theory has much to recommend it as an explanation for the Mississippi bubble.
Indeed, the proposed timing of the theory matches well with what we know about the Mississippi bubble.
Further, experimental studies of bubbles match the Mississippi bubble in several aspects.
Peter Garber, an economic historian, believes that this is all that happened in the Mississippi bubble.
There is also something attractive about this "nonbubble" explanation of the Mississippi bubble.
It bids fair to make the tulip mania and the Mississippi bubble look like temporary blips on an otherwise sound financial scene.
There are two aspects of the Mississippi Bubble in France.
Vogel begins with an overview of historical episodes of asset price bubbles, including the Dutch tulip mania of the 1600s, the South Sea and Mississippi bubbles of the 1700s, the U.
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