TY  - JOUR
AU  - White,Eugene N.
TI  - Bubbles and Busts: The 1990s in the Mirror of the 1920s
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12138
PY  - 2006
Y2  - April 2006
UR  - http://www.nber.org/papers/w12138
L1  - http://www.nber.org/papers/w12138.pdf
N1  - Author contact info:
Eugene N. White
Department of Economics
Rutgers University
75 Hamilton Street
New Brunswick, NJ 08901-1248
Tel: 732-932-7363
Fax: 732/932-7416
E-Mail: white@economics.rutgers.edu
AB  - This paper surveys the twentieth century booms and crashes in the American stock market, focusing on a comparison of the two most similar events in the 1920s and 1990s.   In both booms, claims were made that they were the consequence a %u201Cnew economy%u201D or %u201Cirrational exuberance.%u201D  Neither boom can be readily explained by fundamentals, represented by expected dividend growth or changes in the equity premium.  The difficulty of identifying the fundamentals implies that central banks would not be successful in preventing pre-emptive policies, although they still would have a critical role to play in preventing crashes from disrupting the payments system or sparking an intermediation crisis.
ER  -