In economics, the term "speculative bubble" refers to a large upward move in an asset's price driven not by the asset's fundamentals—that is, by the earnings derivable from the asset—but rather by mere speculation that someone else will be willing to pay a higher price for it.
Topic
Whether the tulip market is an example of a speculative bubble
Framework
Challenge a Position
Position - Mackay believes that he Dutch tulip market is an example, since the price of some bulbs skyrocketed suddenly and ultimately fell to a tiny, tiny fraction of that peak perceived value.
Challenge - Garber is saying that even though there was a rapid escalation in price followed by a dramatic decline, that's actually just how the true economic cycle of tulip bulbs work (early ones are so much more valuable than later ones, that it's normal and rational, i.e. based on the fundamental value of the asset, that prices soared and then declined as they did.
Main Point
Barber thinks that the depiction of the Dutch tulip market, by Mackay and others, as a speculative bubble is wrong.
Summary
P1 - Definition of Speculative Bubble, followed by the Position and the Challenge.
The first few ideas are just warming us up to what speculative bubbles are. Then we zoom in on one specific situation, which is often though to be an example of a speculative bubble. The transition from "According to X ..." to "But the economist Y challenges this position" looks like our Purpose Pivot in the final sentence of the first paragraph, suggesting that Garber's challenge is going to be the main point of the passage.
P2 - The Position being Challenged
This paragraph outlines Mackay's account of how the Dutch tulip market behaved liked the definition of a speculative bubble.
P3 - The Challenge to the Position
This paragraph covers Garber's rebuttal, saying that the typical value pattern for tulip bulbs may resemble a speculative bubble, but it is actually just a symptom of correct, rational economic thinking about the value of a tulip bulb at different stages in time. The author doesn't really show up in this passage. Because Garber is given the last word, we can assume our author is sympathetic to this rebuttal or implicitly agreeing with it, but we would mainly think of this as a neutral passage.