10 Famous Examples of Economic Collapse

10 Famous Examples of Economic Collapse There Are Many Examples of Financial Collapse ChaptersThe Financial Crisis in 2008The Dot-Com BubbleShocks to Oil Prices in 1973The Great DepressionThe French Revolution Is a Lesson in Economic CollapseThe Banking Crisis of 1763The Mississippi BubbleThe South Sea Company Economic CrashTulip Mania Almost Drove the Netherlands to Financial CollapseSpain’s Economic Crash in the 1600sLearn About the Causes Behind An Economic CrashFinancial crises are nothing new. In fact, they’ve been happening for hundreds of years. Below, we highlight some of the most famous examples of economic decline.shrinking GDP; andminimal economic growththe world over. Although recovery is thought to have begun in 1933, it took many more years for countries such as the United States to get back to their pre-crash state.You A Level economics tutors will certainly drill on these four economic quakes!The French Revolution Is a Lesson in Economic CollapseAs noted above, not all financial crises are recent, and there are plenty of examples of economic crashe s even from hundreds of years ago.Although the French Revolution of 1789 is more associated with, well revolution, it is equally true that the revolution began as a result of economic crisis, debt, and ultimately economic collapse in France.Although it almost certainly was not his intention, King Louis XVI’s spending to support the American army during the American Revolution was in part to blame for his own downfall.French spending on the war, coupled with the lavish expenses of the Crown and the upper classes, meant that ordinary French people were left in poverty, with little food or financial support, and revolution quickly ensued.Overspending on the American Revolution led to a financial collapse in France. (Source: Public Domain, Szaaman, Wikimedia Commons)The West Indies.Due to the company’s vast interests and profit-making potential, the valuation of the company increased beyond all rational measure, until, in 1720, the value of the shares in the company crashed, bringin g the stock market in France down along with it, whilst also proving that stock market crashes are not a recent invention.The South Sea Company Economic CrashWhilst France had its own Mississippi bubble, the United Kingdom wasn’t immune from a similar bubble of its own.In Britain’s case, the bubble centred around the South Sea Company, which was also the subject of intense speculation on the stock market. Although its value grew to insane heights, in 1720 the price of the stock crashed, which had a significant impact on the British economy and economic activity.Tulip Mania Almost Drove the Netherlands to Financial CollapseOne of the most famous crashes of the past is the near collapse of the Dutch economy following a period of tulip fever between 1636 and 1637. It is considered to be the first instance of an economic bubble, with the South Sea bubble and the Mississippi bubble, both noted above, being other early examples.In essence, what happened was that tulips, after their in troduction to the Netherlands at the end of the 16th century, became incredibly popular and everyone wanted one. However, as tulips are seasonal flowers, a future’s market was created, which meant that customers could buy the right to purchase a tulip bulb at a later date.However, this led to speculation in the market, which drove up the price of the tulips to unbelievable levels, with some people even selling their land or years’ worth of salary to purchase them. Unsurprisingly, the market crashed in 1637, leaving many people poor. In 2017, the film Tulip Fever was made, which is set during the tulip bubble.Tulip fever in Holland led to a small financial collapse. (Source: CC0 1.0, MabelAmber, Pixabay)Spain’s Economic Crash in the 1600sThe Spanish Empire was famous for its exploration of the New World, and notably for their search for gold. The riches that Spain was able to extract from places such as the Americas bolstered Spain’s currency and purse strings, making Spain o ne of the most powerful empires on the globe.However, continual wars drained Spain of its money, as well as the fact that the almost constant stream of gold and silver produced inflation within its monetary supply.Overall, Spain’s riches proved to be a blessing as well as a curse, with the country declaring bankruptcy six times in the 17th century, in:1607;1627;1647;1652;1662; and1666Learn About the Causes Behind An Economic CrashThe above examples are just some of the most famous examples of economic collapse. As a result, it’s likely that you’ll have come across one or two of these examples during your A-level or university studies in economics.Fundamentally, each economic crisis is different, as they range from disasters caused by speculative behaviour in stock markets to banking systems that collapse and cause mass panic and a global slowdown. As a result, it's best to learn as much about the most famous economic crises as possible, as they all have their own unique causes and effects.If you want to learn more about economic crashes, and in particular what causes them, then you may look at hiring an economics tutor to help you understand more about these economic crises.A tutor can:Walk you through the key events that led to an economic crisis;Help you identify whether there are any common trends or similarities between collapses; andProvide you with relevant examples that you can use in a piece of coursework or essay.Superprof has more than one economics tutor near me that is familiar with the study of economic collapse, and they’d be more than happy to help you succeed in your future economic studies.Find out who are the most influential economists.See yet more of the world's top economists.Read some of the best books on economics.Explore the concept of economic modelling.