Monetary Policy and Asset Prices: A Look at Past U.S. Stock Market Booms (ICPSR 1308)

Version Date: Mar 15, 2005

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Principal Investigator(s):
Michael D. Bordo, Rutgers University and National Bureau of Economic Research; David C. Wheelock, Federal Reserve Bank of St. Louis

https://doi.org/10.3886/ICPSR01308.v1

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Summary

This article examines the economic environments in which past U.S. stock market booms occurred as a first step toward understanding how asset price booms come about and whether monetary policy should be used to defuse booms. The authors identify several episodes of sustained rapid rises in equity prices in the 19th and 20th centuries, and then assess the growth of real output, productivity, the price level, and money and credit stocks during each episode. Two booms stand out in terms of their length and rate of increase in market prices -- the booms of 1923-1929 and 1994-2000. In general, the authors find that booms occurred in periods of rapid real growth and productivity advancement, suggesting that booms are driven at least partly by fundamentals. They find no consistent relationship between inflation and stock market booms, though booms have typically occurred when money and credit growth were above average.

Citation

Bordo, Michael D., and Wheelock, David C. Monetary Policy and Asset Prices:  A Look at Past U.S. Stock Market Booms. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2005-03-15. https://doi.org/10.3886/ICPSR01308.v1

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Funding

Federal Reserve Bank of St. Louis

Subject Terms

Geographic Coverage

Distributor(s)

Inter-university Consortium for Political and Social Research
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Data Collection Notes

  1. (1) The file submitted is data file 0411dwd.xls. (2) These data are part of ICPSR's Publication-Related Archive and are distributed exactly as they arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigators if further information is desired.

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Original Release Date

2005-03-15

Version History

2018-02-15 The citation of this study may have changed due to the new version control system that has been implemented. The previous citation was:

  • Bordo, Michael D., and David C. Wheelock. Monetary Policy and Asset Prices: A Look at Past U.S. Stock Market Booms. ICPSR01308-v1. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2005-03-15. http://doi.org/10.3886/ICPSR01308.v1

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Notes

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