Journal Article
Stock market booms and monetary policy in the twentieth century
Abstract: This article examines the association between stock market booms and monetary policy in the United States and nine other developed countries during the 20th century. The authors find, as was true of the U.S. stock market boom of 1994-2000, that booms typically arose during periods of above-average growth of real output and below-average inflation, suggesting that booms reflected both real macroeconomic phenomena and monetary policy. They find little evidence that booms were fueled by excessive liquidity. Booms often ended within a few months of an increase in inflation and consequent monetary policy tightening. They find few differences across the different monetary policy regimes of the century.
Keywords: Stock market; Monetary policy;
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Bibliographic Information
Provider: Federal Reserve Bank of St. Louis
Part of Series: Review
Publication Date: 2007
Volume: 89
Issue: Mar
Pages: 91-122