Hostname: page-component-8448b6f56d-jr42d Total loading time: 0 Render date: 2024-04-23T13:11:40.341Z Has data issue: false hasContentIssue false
  • English
  • Français

Comparing Bear Markets - 1973 and 2000

Published online by Cambridge University Press:  26 March 2020

E. Philip Davis
E. Philip Davis*
Affiliation:
Brunel University, Uxbridge, Middlesex UB3 4PH, United Kingdom NIESR
*
e-mail e_philip_davis@msn.com, website: www.geocities.com/e_philip_davis
Get access Rights & Permissions [Opens in a new window]

Abstract

In nominal terms, the fall in global share prices since 1999/2000 bears a close resemblance to that experienced worldwide in the years following 1972/3. This article seeks to compare the two periods of market weakness in the G-7 countries in terms not only of share prices but also focusing on macroeconomic trends, financial market developments, sectoral patterns of shareholding and potential wider economic consequences of falling share prices. It is shown that the earlier period was much more severe in terms of adverse economic developments, in particular high inflation. But the current situation also presents some risks, in particular a disruptive correction of US sectoral imbalances.

Type
Articles
Information
National Institute Economic Review , Volume 183 , January 2003 , pp. 78 - 89
Copyright
Copyright © 2003 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

∗

The author thanks Ray Barrell, Joseph Byrne and Martin Weale for helpful suggestions.

References

Ashworth, P. and Davis, E.P. (2001), ‘Some evidence on financial factors in the determination of aggregate business investment for the G7 countries’, Discussion Paper No. 187, National Institute of Economic and Social Research.Google Scholar
Barrell, R. (2002), ‘Equity markets, block realignments and the UK exchange rate’, National Institute Economic Review, 181 (July), pp. 38–43.CrossRefGoogle Scholar
Bollerslev, T. (1986), ‘Generalized autoregressive conditional heteroskedasticity’, Journal of Econometrics, 31, pp. 307–327.CrossRefGoogle Scholar
Byrne, J. and Davis, E.P. (2001), ‘Disaggregate wealth and aggregate consumption: an investigation of empirical relationships for the G7’, Discussion Paper No. 180, National Institute of Economic and Social Research and forthcoming in Oxford Bulletin of Economics and Statistics.Google Scholar
Byrne, J. and Davis, E.P. (2002), ‘Investment and uncertainty in the G-7’, Discussion Paper No. 198, National Institute of Economic and Social Research.Google Scholar
Byrne, J. and Davis, E.P. (2003), Financial Structure, forthcoming, Cambridge University Press.Google Scholar
Campbell, J.Y. and Shiller, R.J. (2001), ‘Valuation ratios and the long run stock market outlook, an update’, NBER Working Paper No. 8221.Google Scholar
Davis, E.P. (1995a), ‘Financial fragility in the early 1990s, what can be learnt from international experience?’, Special Paper No. 76, LSE Financial Markets Group.Google Scholar
Davis, E.P. (1995b), Debt, Financial Fragility, and Systemic Risk, Oxford University Press.CrossRefGoogle Scholar
Davis, E.P. and Madsen, J. (2001), ‘Productivity and equity returns; a century of evidence for 9 OECD countries’, Working Paper 01-12, Brunel University.Google Scholar
Deep, A. and Domanski, D. (2002), ‘Housing markets and economic growth; lessons from the US refinancing boom’, BIS Quarterly Review, September 2002, pp. 37–45.Google Scholar
Gordon, M.J. (1962), The Investment, Financing and Valuation of the Corporation, Irwin, Homewood, Illinois.Google Scholar
International Monetary Fund (IMF) (2000), ‘Asset prices and the business cycle’, in World Economic Outlook, April, pp. 101–149.Google Scholar
Modigliani, F. and Cohn, R.A. (1989), ‘Inflation and the stock market’, in Johnson, S. (ed.), The collected papers of Franco Modigliani, Volume 5. Saving, Deficits, Inflation, and Financial Theory, Cambridge, Mass. and London, MIT Press.Google Scholar