It is true that the demand for tulips in the European market rose rapidly in the17th century, which is one of the necessary conditions for tulip bubble. However, many commodities were in short supply for a period of time, but there was no bubble economy. The formation of tulip bubble must have its own special reasons.

(1) In the short term, even if the price of tulips goes up, manufacturers can't increase the supply quickly. The supply cannot be increased in time to meet the demand, which provides space for speculation-powerful speculators can reduce supply, raise prices and earn profits by hoarding a large number of commodities or monopolizing supply channels. This is the primary condition for the formation of speculative bubbles.

(2) The growth rate of money is much faster than that of the real economy. In addition to consumption and investment in industries, people still have a lot of "spare money" for investment activities-in popular terms, "excess liquidity". This is the second condition for the formation of speculative bubbles.

⑶ The formation of financial market provides financial support and low-cost trading platform for speculative activities. This is the third condition of speculation.