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Technology and the Stock Market: 1885-1998

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  • Boyan Jovanovic

    (New York University)

  • Peter L. Rousseau

    ()
    (Department of Economics, Vanderbilt University)

Abstract

Using 114 years of U.S. stock market data we try to relate movements in stock prices to changes in technology. We find measures of technological progress explain 37% of the 3.9% annual growth in the stock market over the 1885-1998 period, the "Jazz-Age" (1918-1934) entrants were not overvalued, in spite of the 1929 crash and the Great Depression, and the large shift to stocks and away from debt finance over the entire period does not explain the medium and short frequency movements in stock-market capitalization.

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File URL: http://www.accessecon.com/pubs/VUECON/vu00-w42.pdf
File Function: First version, 2000
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Bibliographic Info

Paper provided by Vanderbilt University Department of Economics in its series Vanderbilt University Department of Economics Working Papers with number 0042.

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Date of creation: Oct 2000
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Handle: RePEc:van:wpaper:0042

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Web page: http://www.vanderbilt.edu/econ/wparchive/index.html

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  9. Bart Hobijn & Boyan Jovanovic, 2000. "The information technology revolution and the stock market: preliminary evidence," Proceedings, Federal Reserve Bank of San Francisco, issue Apr.
  10. Rafael Rob & Peter Zemsky, . ""Cooperation, Corporate Culture and Incentive Intensity''," CARESS Working Papres 97-09, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
  11. Gort, M. & Greenwood, J. & Rupert, P., 1998. "Measuring the Rate of Technological Progress in Structures," RCER Working Papers 457, University of Rochester - Center for Economic Research (RCER).
  12. Peter L. Rousseau, 1999. "Share Liquidity and Industrial Growth in an Emerging Market: The Case of New England, 1854-1897," NBER Historical Working Papers 0117, National Bureau of Economic Research, Inc.
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  17. Johnson, William R, 1980. "Vintage Effects in the Earnings of White American Men," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 399-407, August.
  18. Levin, Sharon G & Stephan, Paula E, 1991. "Research Productivity over the Life Cycle: Evidence for Academic Scientists," American Economic Review, American Economic Association, vol. 81(1), pages 114-32, March.
  19. Boyan Jovanovic & Jeremy Greenwood, 1999. "The Information-Technology Revolution and the Stock Market," American Economic Review, American Economic Association, vol. 89(2), pages 116-122, May.
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Cited by:
  1. Alessandro Barbarino & Boyan Jovanovic, 2004. "Shakeouts and Market Crashes," NBER Working Papers 10556, National Bureau of Economic Research, Inc.
  2. John R. Graham & Sonali Hazarika & Krishnamoorthy Narasimhan, 2011. "Financial Distress in the Great Depression," NBER Working Papers 17388, National Bureau of Economic Research, Inc.

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