A new report from the U.S. Congressional Budget Office reveals that the earnings of the top richest 1% grew by 275% betwen 1979 and 2007 - click here for report. The report suggest that the rise of superstars in business, Wall St, sport and entertainment is largely responsible for this rise. But why has this supertsar culture arisen over the past 30 years? Click here for NY Times coverage of this report.
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.