- Teaching Notes
Between 1843 and the autumn of 1845, the UK experienced an unprecedented wave of stock market speculation as investors clamored to spend their savings on shares in a variety of railway development schemes. During this short-lived “railway mania”, the price of railway shares in the UK more than doubled, as planned new investment in the railway network rose to around 8% of GDP in late 1845, before tumbling back down as the bubble burst. This case gives students the chance to step back in time and examine the various behavioral, political, and economic factors that contributed to the speculative mania. Readers can learn more about investor behavior, as well as enhance their understanding of the causes and consequences of stock market bubbles.