Fabio Braggion, Rik Frehen, Emiel Jerphanion, 19 April 2020

How does cheap credit feed into investors’ behaviour? Cheap credit could boost stock prices, even without trading, by lowering the cost of capital. However, it might also enable naïve investors to ride a bubble and lose money. To see what effect prevails, this column collects every stock transaction for three major British companies during the 1720 South Sea Bubble. It finds that loan holders are more likely to buy following high returns, subscribe to overvalued share issues and incur large trading losses.

Anne Murphy, 15 January 2010

Anne Murphy, lecturer in history at the University of Hertfordshire and associate director of the Centre for Financial History at Newnham College, Cambridge, talks to Romesh Vaitilingam about her new book ‘The Origins of English Financial Markets: Investment and Speculation before the South Sea Bubble’. The interview was recorded in London in January 2010.

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