0
$\begingroup$

I'm currently searching for historical changes in prices as a result of a big/sudden change in demand/supply, like the tulip mania in Holland. Are there any notable examples?

$\endgroup$
  • $\begingroup$ You might look at the Arab oil embargo period of 1973-74. $\endgroup$ – Hot Licks yesterday
0
$\begingroup$

Every price change of a good is due to a change in supply/demand. Based on your example are you maybe thinking of sudden price changes due to a bubble? For example with the tullip mania the price of the tullips was completey detached from the utility that anyone actually got from owning tullips. In a nutshell people were willing to pay exorbitant prices for these tullips because they expected to be able to sell them for an even higher price in the future.

Another example would be the dotcom bubble where there was a sudden drop in the value of internet based companies. I want to mention that the people spending a years salary on a tullip bulb weren't necessarily stupid or naive. Think about it like a time bomb where you don't know when it is going to explode. Holding the bomb(owning the asset) allows you to make money and you can hand off the bomb anytime you want. If you are however holding it when it explodes you lose all of your money.

Another example would be the cryptocurrency market.

$\endgroup$

Your Answer

By clicking "Post Your Answer", you acknowledge that you have read our updated terms of service, privacy policy and cookie policy, and that your continued use of the website is subject to these policies.

Not the answer you're looking for? Browse other questions tagged or ask your own question.