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A challenge to triumphant optimists? A blue chips index for the Paris Stock-Exchange (1854-2007)


  • David Le Bris

    (UP4 - Université Paris-Sorbonne)

  • Pierre-Cyrille Hautcoeur

    (PSE - Paris School of Economics, PJSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)


We 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 19 th century, but a negative one because of inflation and wars in the 20 th . 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.

Suggested Citation

  • 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.
  • Handle: RePEc:hal:psewpa:halshs-00586765
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    References listed on IDEAS

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    Cited by:

    1. Jord�, �scar & Knoll, Katharina & Kuvshinov, Dmitry & Schularick, Moritz & Taylor, Alan M., 2017. "The Rate of Return on Everything, 1870-2015," CEPR Discussion Papers 12509, C.E.P.R. Discussion Papers.
    2. Grossman, Richard, 2017. "Stocks for the Long Run: New Monthly Indices of British Equities, 1869-1929," CEPR Discussion Papers 12121, C.E.P.R. Discussion Papers.
    3. Raphaël Hekimian, 2017. "The French banking sector during the interwar: What lessons can be drawn from the stock market?," EconomiX Working Papers 2017-3, University of Paris Nanterre, EconomiX.
    4. Chambers, David & Esteves, Rui, 2014. "The first global emerging markets investor: Foreign & Colonial Investment Trust 1880–1913," Explorations in Economic History, Elsevier, vol. 52(C), pages 1-21.
    5. Turner, John D., 2014. "Financial history and financial economics," QUCEH Working Paper Series 14-03, Queen's University Belfast, Queen's University Centre for Economic History.
    6. G. Bazot & M. D. Bordo & E. Monnet, 2014. "The Price of Stability. The balance sheet policy of the Banque de France and the Gold Standard (1880-1914)," Working papers 510, Banque de France.
    7. repec:wly:jmoncb:v:49:y:2017:i:2-3:p:273-317 is not listed on IDEAS
    8. Raphael Hekimian & David Le Bris, 2016. "US Crashes of 2008 and 1929 How did the French market react? An empirical study," EconomiX Working Papers 2016-21, University of Paris Nanterre, EconomiX.
    9. Quinn, William, 2016. "Technological revolutions and speculative finance: Evidence from the British Bicycle Mania," QUCEH Working Paper Series 2016-06, Queen's University Belfast, Queen's University Centre for Economic History.
    10. Grossman, Richard, 2017. "Beresford's Revenge: British equity holdings in Latin America, 1869-1929," CEPR Discussion Papers 12042, C.E.P.R. Discussion Papers.
    11. Richard S. Grossman, 2015. "Bloody foreigners! Overseas equity on the London Stock Exchange, 1869–1929," Economic History Review, Economic History Society, vol. 68(2), pages 471-521, May.
    12. Campbell, Gareth & Quinn, William & Turner, John D. & Ye, Qing, 2015. "What moved share prices in the nineteenth-century London stock market?," QUCEH Working Paper Series 15-06, Queen's University Belfast, Queen's University Centre for Economic History.
    13. 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.
    14. 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.
    15. Quinn, William, 2016. "Squeezing the bears: Cornering risk and limits on arbitrage during the 'British Bicycle Mania', 1896-1898," QUCEH Working Paper Series 2016-05, Queen's University Belfast, Queen's University Centre for Economic History.
    16. repec:eee:ecolet:v:159:y:2017:i:c:p:119-122 is not listed on IDEAS
    17. Goetzmann, Will & Le Bris, David & Pouget, Sébastien, 2017. "The Present Value Relation Over Six Centuries: The Case of the Bazacle Company," TSE Working Papers 17-794, Toulouse School of Economics (TSE).
    18. Bazot, Guillaume & Bordo, Michael D. & Monnet, Eric, 2016. "International shocks and the balance sheet of the Bank of France under the classical gold standard," Explorations in Economic History, Elsevier, vol. 62(C), pages 87-107.
    19. Jérémy Ducros & Angelo Riva, 2014. "The Lyon Stock Exchange: A Struggle for Survival (1866-1914)," PSE Working Papers halshs-00960528, HAL.
    20. Jérémie Cohen‐Setton & Joshua K. Hausman & Johannes F. Wieland, 2017. "Supply‐Side Policies in the Depression: Evidence from France," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 49(2-3), pages 273-317, March.
    21. Annaert, Jan & Mensah, Lord, 2014. "Cross-sectional predictability of stock returns, evidence from the 19th century Brussels Stock Exchange (1873–1914)," Explorations in Economic History, Elsevier, vol. 52(C), pages 22-43.


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