In the 17th century citizens of the Netherlands enjoyed an historic era of art and prosperity known as the Dutch Golden Age. Wealthy merchants spent lavishly on all sorts of luxuries, including a new flower imported from Turkey called the tulip. Demand for tulips reached incredible heights until the bottom suddenly fell out of the market. This short video looks at what many economists consider to be the first market bubble to burst.
- How does the Dutch tulip craze compare to recent bubbles like the subprime mortgage crisis?
- Why do you think bubbles develop in some markets?