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In Search of Stock Market Bubbles: A Comment on Rappoport and White

Published online by Cambridge University Press:  03 March 2009

Tung Liu ,
Gray J. Santoni  and
Courtenay C. Stone
Tung Liu
Affiliation:
Assistant Professor of Economics, Distinguished Professor of Economics, and Professor of Economics, respectively, at Ball State University, Muncie, IN 47306.
Gray J. Santoni
Affiliation:
Assistant Professor of Economics, Distinguished Professor of Economics, and Professor of Economics, respectively, at Ball State University, Muncie, IN 47306.
Courtenay C. Stone
Affiliation:
Assistant Professor of Economics, Distinguished Professor of Economics, and Professor of Economics, respectively, at Ball State University, Muncie, IN 47306.
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Extract

In a recent article in this JOURNAL, Peter Rappoport and Eugene N. White (hereafter R-W) conclude that, “while there is still room for skepticism [of the presence of a bubble in the boom and bust stock market of 1928/29], the traditional accounts of a bubble in the market cannot be so easily dismissed”.1 Their conclusion is not based on econometric evidence for a stock market bubble per Se. Instead, it is based solely on their interpretation of the widening spread between the interest rates on brokers’ loans (call and time loans collateralized by stocks and bonds) and other money market interest rates in 1928 and 1929.

Information

Type
Notes and Discussions
Information
The Journal of Economic History , Volume 55 , Issue 3 , September 1995 , pp. 647 - 654
Copyright
Copyright © The Economic History Association 1995

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References

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