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Bubbles, Booms and Crashes in the US Stock Market 1792-2024

Author

Listed:
  • William N. Goetzmann
  • Otto Manninen
  • James Tyler

Abstract

We examine the historical frequency of stock market booms, crashes, and bubbles in the United States from 1792 to 2024 using aggregate market data and industry-level portfolios. We define a bubble as a large boom followed by a crash that reverses the market’s prior gains. Bubbles are extremely rare. We extend the industry-level analysis of Greenwood, Shleifer, and You (2019) through 2024 and replicate their findings out of sample using Cowles Commission industry data from 1871 to 1938. Booms do not reliably predict crashes, but they do predict higher subsequent volatility, increasing the likelihood of both large gains and large losses.

Suggested Citation

  • William N. Goetzmann & Otto Manninen & James Tyler, 2026. "Bubbles, Booms and Crashes in the US Stock Market 1792-2024," NBER Working Papers 34903, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:34903
    Note: AP
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    More about this item

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G4 - Financial Economics - - Behavioral Finance

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