Is bitcoin a bubble? This excellent paper by Peter Garber, which was published in the Journal of Political Economy (JPE) way back in 1989, has made me adjust my bitcoin priors. In brief, I used to believe bitcoin was just a fad (see here and here, for example), but now Garber’s work has made me rethink whether the very concept of a “bubble” is a coherent or meaningful one. That said, even if bitcoin were not a bubble, that still leaves two other possibilities: either the bitcoin blockchain began as a prank or practical joke or it’s an outright scam or Ponzi scheme. Change my mind!

Postscript: Professor Garber’s work has passed the test of time (see here, for example), but I seriously doubt whether the same will be said of most of the formal and technical “blackboard economics” papers being published today. In fact, if I were editor of the JPE, I would henceforth banish all equations to the appendices.