Free exchange:Betting the house

摘要

Robert morris would have enjoyed the recent American housing boom. A signatory of the Declaration of Independence, he profited handsomely in the 1790s by "flipping" land on the American frontier. His business, acquiring millions of acres from Native Americans and friends of the crown and then selling them on to speculators, probably made him the richest man in America until dearer credit left him bankrupt. In a new paper Edward Glaeser of Harvard University argues that America's long history of property manias has lessons for those aiming to minimise the pain of future busts. In particular, exuberant buyers may be more rational than many assume.