I agree, the 19th Century railroad surge was most likely bubble driven. Some bubbles drive investment in capital goods (these tend to have some positive spillovers for non-investors) and some don’t. In recent times the tech bubble was a capital good bubble and the housing bubble was pretty much a consumption bubble. In the 19th Century the railroad bubble was a capital bubble and the tulip bubble was consumption good based.
That’s what happens when I try to comment from memory. I think the basic point stands though. Bubbles of different kinds have existed since financial exchanges have existed and I don’t think there’s a pattern toward particularly destructive ones.
I agree, the 19th Century railroad surge was most likely bubble driven. Some bubbles drive investment in capital goods (these tend to have some positive spillovers for non-investors) and some don’t. In recent times the tech bubble was a capital good bubble and the housing bubble was pretty much a consumption bubble. In the 19th Century the railroad bubble was a capital bubble and the tulip bubble was consumption good based.
FWIW, the tulip bubble was in the 17th century. The South Seas bubble was in the 18th.
That’s what happens when I try to comment from memory. I think the basic point stands though. Bubbles of different kinds have existed since financial exchanges have existed and I don’t think there’s a pattern toward particularly destructive ones.