Dutch Tulip Bulb Market Bubble

The dutch tulip bulb market bubble was one of the most famous asset bubbles and crashes of all time.

Dutch tulip bulb market bubble. The tulip bubble had burst. When the tulip bubble suddenly burst in 1637 mackay claimed that it wreaked havoc on the dutch economy. What was the dutch tulip bulb market bubble. It is generally considered the first recorded speculative bubble or asset bubble in history.

The demand for differently coloured varieties of tulips soon exceeded the supply and prices for individual. Tulip growers began cultivating a multitude of varieties and members of the rising dutch middle class paid large sums of money for the newest and most brilliantly colored flowers and bulbs. The rarest tulip bulbs traded for as much as six times the average person s annual salary at the height of the market. At the height of the bubble tulips sold for approximately 10 000 guilders equal to the value.

The same tulip bulb or rather tulip future was traded sometimes 10 times a day. The ensuing panic spread across holland and within days tulip bulbs were worth only a hundredth of their former prices. The dutch tulip bulb market bubble or tulip mania was a period in the dutch golden age during which contract prices for some of the tulip bulbs reached extraordinarily high levels and then dramatically collapsed in february 1637. Like all bubbles the dutch tulip bulb bubble continued to inflate beyond people s wildest expectations until it abruptly popped in the winter of 1636 37.

Tulips were introduced into europe from turkey shortly after 1550 and the delicately formed vividly coloured flowers became a popular if costly item. Looking back through time it s easy to laugh at the foolish dutch paying such prices for simple tulip bulbs but an economic bubble was nothing new even then. A default on a tulip bulb contract by a buyer in haarlem was the main bubble popping catalyst and caused the tulip bulb market to violently implode as sellers overwhelmed the market and. Tulip mania also called tulip craze dutch tulpenwindhandel a speculative frenzy in 17th century holland over the sale of tulip bulbs.

Paid more than 300 guilders for a tulip bulb the equivalent of what a skilled. The dutch tulip bulb market bubble occurred in holland during the early 1600s when speculation drove the value of tulip bulbs to extremes. In many ways the tulip mania was more of a hitherto.