A challenge to triumphant optimists? A blue chips index for the Paris Stock-Exchange (1854-2007)
AbstractWe analyze a new blue chips (large caps) stock index for France from 1854 to 1998. We detail its methodology and show that it differs profoundly from earlier indices, and that it is more consistent with the French financial and economic history. We suggest this result casts some doubt on many historical stock indices such as those gathered in Dimson, Marsh and Staunton' Triumph of the Optimists. We also provide some major results: investment in French stocks provided a positive real return during the 19th century, but a negative one – because of inflation and wars – in the 20th. Despite this century of negative real performance, stocks are still the best financial asset for the very long run but, with an equity premium lower than in the US.
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Bibliographic InfoPaper provided by HAL in its series Post-Print with number hal-00468209.
Date of creation: Oct 2010
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Publication status: Published, Financial History Review, 2010, 17, 2, 141-183
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Paris Stock-Exchange; stock index; survivor bias; sample bias; weighting problems; stock return; long term performances; equity premium; gold; 19th century; 20th century;
Other versions of this item:
- Le Bris, David & Hautcœur, Pierre-Cyrille, 2010. "A challenge to triumphant optimists? A blue chips index for the Paris stock exchange, 1854–2007," Financial History Review, Cambridge University Press, vol. 17(02), pages 141-183, October.
- David Le Bris & Pierre-Cyrille Hautcoeur, 2009. "A challenge to triumphant optimists? A blue chips index for the Paris Stock-Exchange (1854-2007)," PSE Working Papers halshs-00586765, HAL.
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- David le Bris & William N. Goetzmann & Sébastien Pouget, 2014. "Testing Asset Pricing Theory on Six Hundred Years of Stock Returns: Prices and Dividends for the Bazacle Company from 1372 to 1946," NBER Working Papers 20199, National Bureau of Economic Research, Inc.
- Piketty, Thomas & Postel-Vinay, Gilles & Rosenthal, Jean-Laurent, 2014. "Inherited vs self-made wealth: Theory & evidence from a rentier society (Paris 1872–1927)," Explorations in Economic History, Elsevier, vol. 51(C), pages 21-40.
- Jérémy Ducros & Angelo Riva, 2014. "The Lyon Stock Exchange: A Struggle for Survival (1866-1914)," PSE Working Papers halshs-00960528, HAL.
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