Which 1720 Paris speculation collapse is known for the failure of John Law’s Mississippi Company?

The 1720 Paris speculation collapse caused by the failure of John Law’s Mississippi Company is known as the Mississippi Bubble.

John Law’s company held a monopoly over French trade claims linked to the Mississippi region, and its shares rose dramatically as investors believed exaggerated reports of American wealth. Law also controlled a bank that issued paper money, tying share speculation to monetary expansion. Confidence broke in 1720 when investors sought to convert inflated paper and shares into more stable assets.

Share prices collapsed, many investors lost fortunes and Law fled France. The episode occurred in the same year as Britain’s South Sea Bubble, but they were separate companies and markets. Both crises became classic examples of how promotional stories, easy credit and crowd psychology can drive prices far beyond underlying value.