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Overcoming Bias Commenter's avatar

Let me go back to the original argument. The three "innovations" in finance were institutional, but they had nothing to do with technology. It is not comparable to say some change in the financial system arising due to the invention of the internet and the emergence of online banking, or the invention of computers and advanced software leading to automated trading systems.

As for the reconfiguration of international trade, cross-Atlantic trade had already been going on for several centuries by 1720. The more historically astute Charles Kindleberger identified what lay behind the two bubbles as being the Treaty of Utrecht in 1713, which certainly had nothing to do with technology. It ended the War of the Spanish Succession, thereby ending seafaring wars that had been disrupting trade routes that already existed. This period coincided also with the peak of piracy, which would also begin to subside as the period of peace became increasingly established.

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Overcoming Bias Commenter's avatar

What about all those Efficient Market Hypothesis adherents who tell us there are no such things as bubbles?

In my naive way, I would have thought purchases of assets based on expectations of rising value in excess of actual increases in income from the assets would be a bubble. Surely, that is what happened with the housing bubbles, for example.

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