Bubbles and Busts: The 1990s in the Mirror of the 1920s / Eugene N. White.

Format:

Book

Author/Creator:

White, Eugene N.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w12138.

NBER working paper series no. w12138

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Bubbles and Busts

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2006.

Summary:

This paper surveys the twentieth century booms and crashes in the American stock market, focusing on a comparison of the two most similar events in the 1920s and 1990s. In both booms, claims were made that they were the consequence a "new economy" or "irrational exuberance." Neither boom can be readily explained by fundamentals, represented by expected dividend growth or changes in the equity premium. The difficulty of identifying the fundamentals implies that central banks would not be successful in preventing pre-emptive policies, although they still would have a critical role to play in preventing crashes from disrupting the payments system or sparking an intermediation crisis.

Notes:

Print version record

April 2006.