Lesson 3
Manias, Bubbles, and Panics in World History

This lesson addresses the psychology surrounding speculative manias, often referred to as bubbles. The class will be introduced to some of the theories behind bubbles and apply those concepts to the recent housing bubble. Students will then be introduced to five bubble events in world history: Tulipmania, the South Sea Bubble, the Roaring Twenties Stock Bubble, Japan's Bubble Economy, and the Dot-com Bubble. Students will participate in an activity to analyze the features of the five bubbles to find similarities. Each bubble era will be assigned a number (1-5) and each student a corresponding number (1-5). The like-numbered students will meet and analyze the basic issues. Then new groups will be formed. The students will acquire information about their bubble from one of the essays in the lesson package and arrange the similarities of these events.


  • Externalities
  • Incentive
  • Market
  • Price
  • Speculation

Standards in Economics and Personal Finance

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