My postgraduate
Money and Banking class had to set up a blog on a topic of their choosing. There were many interesting blogs created by
my students, but the top Blogger in the class was Berta Kruminaite, who blogged
about the Dutch tulip mania. The Dutch
tulip mania, which occurred in Amsterdam in 1536-7, saw a dramatic reversal in the
price of tulip bulbs. This mania episode
is traditionally regarded as the first famous 'bubble'. However, over the years, economists have
taken different positions as to whether the Dutch tulip mania really was a ‘bubble’. Berta does a great job of presenting these
different views. She even manages to include
a video clip of Newt Gingrich discussing the tulip mania! You can access Berta’s blog here.
According to Robert Shiller , speaking at Davos, Bitcoin is a perfect example of a bubble - story here . Shiller sees Bitcoin as a backwards step in the evolution of money. George Selgin , a free banker, takes an opposing view - click here . Although he doesn't believe that Bitcoin is money, he sees its development as a fascinating turn in the evolution of money. In particular, he lauds the fact that Bitcoin production is constrained and cannot be infinite. There is a short video below where Bitcoin explain how it works.