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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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  7. 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.
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  11. Bart Hobijn & Boyan Jovanovic, 2000. "The information technology revolution and the stock market: preliminary evidence," Proceedings, Federal Reserve Bank of San Francisco, issue Apr.
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  17. Lucas, Robert E, Jr, 1978. "Asset Prices in an Exchange Economy," Econometrica, Econometric Society, vol. 46(6), pages 1429-45, November.
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  19. Rafael Rob & Peter Zemsky, . "Cooperation, Corporate Culture and Incentive Intensity," Penn CARESS Working Papers 1295607a7fac93b3ec145505a, Penn Economics Department.
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