ABSTRACT

Economic crisis issue is the leading among argued subjects in the capitalist development period. In this sense, there had been numerously different opinions emerged to interpret the crisis in the economics literature. Modern international economics and finance structure of the world is accelerating the contagion of the crisis with the improvements due to the recent capitalist system comprehensions. In addition, formation of bubbles is constructing the main relationship between current financial crises and the other historical economic depressions. The study discusses The Bubble Act regulations issued in the first quarter of 18th Century in the year of 1720 to intervene the financial system of United Kingdom (UK) for The South Sea Company bubble. Commonly respected founder of the economics discipline Adam Smiths‘ approach to the mentioned incident is also quite noteworthy. Our study analyzes the concerns for the sample of ―South Sea Bubble‖ case throughout the Adam Smith era under the circumstances of liberal economic system depressions. In this way, the scope outs for economic crisis would be determined by the historical understanding of Adam Smith‘s economics approaches as well.