Economies in meltdown: lessons from past financial crashes
HistoryExtra podcast
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The Importance of Euphoria in the Great Crash
All the crashes are somewhat different, but they do all share these three phases that we could see clearly in the Wall Street crash of 1929. The very first one is exuberance or euphoria. Every crash is predated by euphoric belief that prices will only go up. And then the second phase is the bust. So Japan had lost decades on the back of that crash. I think through history, you might consider it to be human beings piling in, financially pushing up asset prices through borrowing. It's interesting how, well, Mark Twain said it best, history doesn't repeat itself, but it does rhyme.
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