Tulipomania: Mutemwa Mwitumwa
Tulipomania: Mutemwa Mwitumwa
Tulipomania: Mutemwa Mwitumwa
Mutemwa Mwitumwa
Contents
• What is an Economic Bubble?
• What is Tulipomania?
• Introduction of Tulips in the Netherlands
• Events Leading up to The Tulip Bulb Bubble
• The Mania Phase
• The Crash
What is an economic bubble?
An economic bubble is a market condition by which the price of an asset costs more than its
intrinsic value.
It was a case that played on the: An episode that saw the rise in tulip
prices driven by speculators
• Dutch trade with foreign lands led to the importation of exotic goods such as Tulips
• Tulips where first introduced to the Netherlands from turkey shortly after 1554
• Tulips were imported by the Dutch East India Company that traded various goods. From
spices, to blue glass and to the importation of tulips on the Dutch soil.
A symbol of wealth
Form of currency
Events leading up to the tulip bulb
bubble
Beginning
Peak Phase
Phase
The Mania Phase
Beginning
Phase
Peak Phase
• By the peak of tulipomania in February of 1637, a single tulip
bulb was worth about ten times a craftsman’s annual salary.
• This led to more traders risking their money by investing in
buying tulip bulbs in hopes of making a fortune.
• Merchants were known to sell all their belongings in order to
buy a single tulip bulb.
Scale of the peak phase
The tulip bulb prices rose high enough that one tulip bulb was traded in exchange for:
• A suit of clothes
• A complete bed
• A silver drinking cup
• Twelve fat sheep