Abstract
The South Sea bubble resulted from an equity-for-government debt swap that had gone wrong, and occurred in England in 1720. Prices of South Sea Company stock rose sharply following the announcement of the scheme, and collapsed eight months later. Frequently cited as an example of investors’ folly, the factors driving the sharp rise and fall of South Sea Company share prices have remained controversial. The so-called Bubble Act of 1720, passed before the bubble peaked, restricted the development of a vibrant market in publicly traded companies for a century.
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Voth, HJ. (2018). South Sea Bubble. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2086
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DOI: https://doi.org/10.1057/978-1-349-95189-5_2086
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