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Business Activity and the Boston Stock Market, 1835-1869

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  • Atack, Jeremy
  • Rousseau, Peter L.

Abstract

This paper examines the performance of the Boston stock market, the nation's premier market for industrials, between 1835 and 1869, developing new indexes of price performance, dividend yields and total holding period returns for bank stocks and industrial equities using annual data from Martin (1871). Using these new series and a set of VAR models we conclude that disturbances in the banking sector, as manifested by declines in total stockholder returns, led to increases in short-term lending rates which in turn led to declines in the price performance of traded manufacturing firms. There is no evidence of feedback from manufacturing returns to bank stock prices via lending rates. The findings are consistent with a key role for banks in nineteenth century business fluctuations.
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Suggested Citation

  • Atack, Jeremy & Rousseau, Peter L., 1999. "Business Activity and the Boston Stock Market, 1835-1869," Explorations in Economic History, Elsevier, vol. 36(2), pages 144-179, April.
  • Handle: RePEc:eee:exehis:v:36:y:1999:i:2:p:144-179
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    References listed on IDEAS

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    Cited by:

    1. Eric Hilt, 2014. "Corporate Governance and the Development of Manufacturing Enterprises in Nineteenth-Century Massachusetts," NBER Chapters,in: Enterprising America: Businesses, Banks, and Credit Markets in Historical Perspective, pages 73-102 National Bureau of Economic Research, Inc.
    2. 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.
    3. Rousseau, Peter L. & Sylla, Richard, 2005. "Emerging financial markets and early US growth," Explorations in Economic History, Elsevier, vol. 42(1), pages 1-26, January.
    4. Annaert, Jan & Buelens, Frans & De Ceuster, Marc J.K., 2012. "New Belgian Stock Market Returns: 1832–1914," Explorations in Economic History, Elsevier, vol. 49(2), pages 189-204.

    More about this item

    JEL classification:

    • N21 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: Pre-1913
    • N11 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: Pre-1913

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