Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- List of contributors
- Preface
- 1 Understanding the 1990s: a long-run perspective
- 2 The world economy in the 1990s: a long-run perspective
- 3 Managing the world economy in the 1990s
- 4 Europe: a continent in decline?
- 5 Technical change and US economic growth: the interwar period and the 1990s
- 6 General-purpose technologies: then and now
- 7 Productivity growth and the American labor market: the 1990s in historical perspective
- 8 The 1920s and the 1990s in mutual reflection
- 9 Bubbles and busts: the 1990s in the mirror of the 1920s
- 10 The 1990s as a postwar decade
- 11 What is happening to the welfare state?
- 12 The American economic policy environment of the 1990s: origins, consequences, and legacies
- References
- Author index
- Subject index
9 - Bubbles and busts: the 1990s in the mirror of the 1920s
Published online by Cambridge University Press: 14 January 2010
- Frontmatter
- Contents
- List of figures
- List of tables
- List of contributors
- Preface
- 1 Understanding the 1990s: a long-run perspective
- 2 The world economy in the 1990s: a long-run perspective
- 3 Managing the world economy in the 1990s
- 4 Europe: a continent in decline?
- 5 Technical change and US economic growth: the interwar period and the 1990s
- 6 General-purpose technologies: then and now
- 7 Productivity growth and the American labor market: the 1990s in historical perspective
- 8 The 1920s and the 1990s in mutual reflection
- 9 Bubbles and busts: the 1990s in the mirror of the 1920s
- 10 The 1990s as a postwar decade
- 11 What is happening to the welfare state?
- 12 The American economic policy environment of the 1990s: origins, consequences, and legacies
- References
- Author index
- Subject index
Summary
“History is continually repudiated.”
Glassman and Hassett (1999), The Dow 36,000Stock market booms and busts command enormous attention, yet there is little consensus about their causes and effects. The soaring market of the 1990s was seen by many, but certainly not all, as the harbinger of a new age of sustained, rapid economic growth. Optimists saw the bull market as driven by fundamentals, although they differed over what these were; while skeptics warned that it was just a bubble, distorting consumption and investment decisions. Regardless of the boom's origin, policymakers feared that a collapse would have real economic consequences and debated how to cope with the market's retreat.
Although the sheer size of the run-up in stock prices in the 1990s has obscured other bull markets in the popular eye, the boom shared many characteristics with previous episodes, notably the 1920s; and the explanations and policy concerns were similar. As in the 1990s, it was widely claimed that a “new economy” had taken root in the United States. Technological and organizational innovations were viewed as raising productivity, increasing firms' earnings and justifying the wave of new issues. In both periods unemployment was low, with stable prices in the 1920s and very low inflation in the 1990s. Participation in the market increased, as investing in the market seemed safer, with reduced macroeconomic risk and the seeming abundance of high-return opportunities.
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- The Global Economy in the 1990sA Long-Run Perspective, pp. 193 - 217Publisher: Cambridge University PressPrint publication year: 2006
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