The 1929 stock market
Subtitle: Irving Fisher was right
By: Ellen R. McGrattan and Edward C. Prescott.
Contributors: Prescott, Edward C.
Series: Federal Reserve Bank of Minneapolis, Research Department staff report ;; 294; Staff report (Federal Reserve Bank of Minneapolis. Research Dept. : Online) ;; 294.
Publisher: Federal Reserve Bank of Minneapolis
Published: 2003
Place of publication: [Minneapolis, Minn.]
Language: eng
Format: Electronic resource
Subjects: Fisher, Irving, 1867-1947.; Stock Market Crash, 1929.; Corporations -- Valuation.
Description: "Many stock market analysts think that in 1929, at the time of the crash, stocks were overvalued. Irving Fisher argued just before the crash that fundamentals were strong and the stock market was undervalued. In this paper, we use growth theory to estimate the fundamental value of corporate equity and compare it to actual stock valuations.Our estimate is based on values of productive corporate capital, both tangible and intangible, and tax rates on corporate income and distributions.The evidence strongly suggests that Fisher was right.Even at the 1929 peak, stocks were undervalued relative to the prediction of theory"--Federal Reserve Bank of Minneapolis web site.
Notes: Includes bibliographical references.
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Mode of access: World Wide Web.