Click here to read about the creation of a new currency
in Bristol - the Bristol Pound (hat tip to Chris Colvin, an old Bristolian) Unlike past attempts to create a local
currency, the creators of the Bristol currency have taken care of the last
period problem associated with fiat money.
How have they done this? Well, in
true Thompsonian fashion, the local government accepts the new currency as
payment for local taxes (rates)! This
ensures that it has value in the last period, and therefore encourages traders
and shoppers in Bristol to use it.
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.