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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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Cited by:
  1. Alessandro Barbarino & Boyan Jovanovic, 2007. "Shakeouts And Market Crashes," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(2), pages 385-420, 05.
  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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