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

William N. Goetzmann; Otto Manninen; James Tyler

doi:10.3386/w34903

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

William N. Goetzmann, Otto Manninen & James Tyler

Working Paper 34903

DOI 10.3386/w34903

Issue Date February 2026

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.

We thank Laurence B. Siegel and Roger G. Ibbotson for helpful comments. We gratefully acknowledge research support from the International Center for Finance at the Yale School of Management. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

William N. Goetzmann
In addition to my role as a faculty member at Yale, I am engaged in a number of outside activities.

1. I serve as the Executive Editor of the Financial Analysts Journal

2. I serve on the board of the Jeffrey Company, an investment company.

3. Within the last five years I have testified as an expert witness in cases involving the financial industry.

These include cases related to mortgage-backed securities on behalf of Credit Suisse.

4. I serve on the board of Hamden Hall Country Day School.

6. I periodically receive compensation for lectures outside of Yale and service as a referee or reviewer.

My paid reviewer activity includes honoraria from the Carnegie Corporation.
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William N. Goetzmann, Otto Manninen, and James Tyler, "Bubbles, Booms and Crashes in the US Stock Market 1792-2024," NBER Working Paper 34903 (2026), https://doi.org/10.3386/w34903.

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

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