Tulipomanía

Tulipomanía was a period in the Dutch Golden Age during which contract prices for bulbs of the recently introduced tulip reached extraordinarily high levels and then suddenly collapsed. The word "tulipomania" is now often used by analogy to describe any asset bubble. The tulip was introduced to Europe from Turkey in the 16th century and became a popular luxury item. The peak of the bubble was in February 1637, when some bulbs sold for more than 10 times the annual income of a skilled craftsman. The crash occurred on February 3, 1637, when buyers suddenly stopped appearing at a bulb auction in Amsterdam. The price of bulbs then plummeted. Many investors were ruined. The economic impact of the crash is debated among historians, with some arguing it had a significant effect and others suggesting it was a relatively minor event. The episode remains a famous historical example of speculative excess and market psychology.