Most Bubbles have been identified retrospectively. “Yes, that was a financial Bubble.” Similarly from an historical perspective we can divide our understanding of Bubbles into three major stages, though in all three stages Bubbles have been recognized and analyzed after the fact. These three major analytical stages are Pre-1978; 1978 to 2000; and then after 2000.
In the Pre-1978 stage financial Bubbles were recognized and assessed as a social or crowd-based phenomenon [Bagehot], even a type of sickness that could affect the masses [Dickens]. There were also detailed descriptions and analyses of specific Bubbles such as the great South Sea, Mississippi, and 1929 Bubbles. Already in the 19th Century Walter Bagehot observed “Much has been written about panics and manias, …; but one thing is certain, that at particular times a great deal of stupid people have a great deal of stupid money; it seeks for someone to devour it; … there is speculation; it is devoured and there is panic.”