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Instability in the financial system is a byproduct of speculative excess from "summary" of A Short History of Financial Euphoria by John Kenneth Galbraith

Speculative excess is the breeding ground for financial instability, a fact well known to those who have studied the history of financial euphoria. When individuals and institutions engage in excessive speculation, they create an environment that is ripe for instability. This is because speculation often leads to price distortions and unsustainable trends in the financial markets. During periods of speculative excess, investors tend to abandon rational decision-making and instead follow the herd. This herd mentality can result in the formation of asset bubbles, where prices are driven to unsustainable levels by the collective actions of speculators. These bubbles inevitably burst, leading to sharp corrections in asset prices and widespread financial instability. The after...
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    A Short History of Financial Euphoria

    John Kenneth Galbraith

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