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Technology and the Stock Market: 1885-1998

Author

Listed:
  • 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.

Suggested Citation

  • Boyan Jovanovic & Peter L. Rousseau, 2000. "Technology and the Stock Market: 1885-1998," Vanderbilt University Department of Economics Working Papers 0042, Vanderbilt University Department of Economics.
    • Handle: RePEc:van:wpaper:0042
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    File URL: http://www.accessecon.com/pubs/VUECON/vu00-w42.pdf
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    Cited by:

    1. John R. Graham & Sonali Hazarika & Krishnamoorthy Narasimhan, 2011. "Financial Distress in the Great Depression," NBER Working Papers 17388, National Bureau of Economic Research, Inc.
    2. James Costain & Beatriz de-Blas-Perez, 2006. "Productivity Shocks and the Business Cycle: Reconciling Recent VAR Evidence," 2006 Meeting Papers 698, Society for Economic Dynamics.

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