As financial crises became more frequent during recent decades, so also have books about them, as well as about crises that occurred centuries earlier. These studies tend to come in three styles: (1) narratives of one or more crises, usually by historians and journalists; (2) financial-economic-heuristic models of the typical patterns or essential stages of crises, as illustrated by historical examples, often adduced by financial economists with historical interests; and (3) large-scale data assemblies and econometric analyses covering decades or centuries of crises by economists.1
Boom and Bust, written by two financial economists who observed firsthand from their posts in Belfast the devastating effects of the global financial crisis from 2007 to 2009 on Ireland, combines styles 1 and 2. The authors call their simple model “the bubble triangle.” Its three sides (with analogies to a fire) are marketability (oxygen), money and credit (fuel), and speculation (heat). Financial...