Charles P. Kindleberger
Financial bubbles are not random anomalies but predictable biological cycles driven by pro-cyclical credit expansion and collective human euphoria.
Bubbles begin with a displacement, such as a major technological innovation or financial deregulation, that radically disrupts the market and promises outsized profits.
The ensuing speculative mania is inherently a monetary phenomenon fueled by the rapid, pro-cyclical expansion of bank credit rather than just irrational exuberance.
As asset prices disconnect from their fundamental value, market euphoria draws in novice investors who mistakenly believe that the current cycle will defy historical gravity.