'History does not repeat itself, but it rhymes.' - Mark Twain

The recurring nature of market extremes provide some recent examples - Japanese real estate and stocks in the 1980s; the internet mania of 1999 & 2000; and, of course, housing markets in various countries.


In 'Manias, Panics, and Crashes', Charles Kindleberger & Robert Aliber, outline the model:

... a bubble is an upward price movement over an extended period of fifteen to forty months that then implodes. Someone with 'perfect foresight' should have foreseen that the process was not sustainable and that an implosion was inevitable.

A model developed by Hyman Minsky... [he] believed that pro-cyclical increases in the supply of credit in good times and the decline in the supply of credit in less buoyant economic times led to fragility in financial arrangements and increased the likelihood of financial crisis.

The boom in the Minsky model is fueled by...

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