Last week, I was re-reading Gayer, Rostow and Schwartz's The Growth and Fluctuation of the British Economy 1790-1850. Just after I had finished, I heard the sad news that Anna Jacobson Schwartz had passed away aged 96. Schwartz worked daily in her NBER office up until very recently and was highly critical of the the Fed's actions and expansion during the financial crisis. I had the privilege of meeting Anna Schwartz in the mid-1990s - she was a gracious scholar who was very keen to talk to a young PhD student from Queen's University. I was amazed by her intellectual sharpness and her humility - the two things all great scholars should possess. You can read obits here and here.
My colleague and former PhD student Gareth Campbell has created a website about the British Railway Mania - click here . This episode has been described by the Economist as probably the greatest bubble in human history. Gareth's website provides background on the Mania and posits some explanations for the 'bubble'. In his explanation of why the bubble happened, Gareth places a lot of emphasis on investor myopia regarding future dividends and uncalled capital. His study of investors during the episode does not support the view that this episode was fuelled by naive and irrational investors.
