Click here to read a recent Bank of England Quarterly Bulletin article on how commercial banks create money in the modern economy. A video interview with one of the report's authors is below and an excellent critique of the article's discussion of QE can be found at Uneasy Money.
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.