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Technology and the Stock Market: 1885-1998

  • Boyan Jovanovic

    (New York University)

  • Peter L. Rousseau

    ()

    (Department of Economics, Vanderbilt University)

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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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
Contact details of provider: Web page: http://www.vanderbilt.edu/econ/wparchive/index.html

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  12. Fumio Hayashi, 1981. "Tobin's Marginal q and Average a : A Neoclassical Interpretation," Discussion Papers 457, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  13. Claudia Goldin & Lawrence F. Katz, 1999. "The Returns to Skill in the United States across the Twentieth Century," NBER Working Papers 7126, National Bureau of Economic Research, Inc.
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  16. Boyan Jovanovic & Jeremy Greenwood, 1999. "The Information-Technology Revolution and the Stock Market," American Economic Review, American Economic Association, vol. 89(2), pages 116-122, May.
  17. 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.
  18. Ariel Pakes, 1986. "Patents as Options: Some Estimates of the Value of Holding European Patent Stocks," NBER Working Papers 1340, National Bureau of Economic Research, Inc.
  19. Bart Hobijn & Boyan Jovanovic, 2000. "The information technology revolution and the stock market: preliminary evidence," Proceedings, Federal Reserve Bank of San Francisco, issue Apr.
  20. Andrew Atkeson & Patrick Kehoe, 1997. "Industry Evolution and Transition: A Neoclassical Benchmark," NBER Working Papers 6005, National Bureau of Economic Research, Inc.
  21. Johnson, William R, 1980. "Vintage Effects in the Earnings of White American Men," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 399-407, August.
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