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Stock market booms in economies damaged during World War II

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  • Suzuki, Shiba

Abstract

Some studies find that real equity prices in economies damaged during World War II tended to rise sharply at the beginning of actual damage taking place during the war. This paper introduces an empirically plausible degree of persistence from the impact of World War II and demonstrates that stock market booms in economies damaged during the war are consistent with an equilibrium model of asset pricing.

Suggested Citation

  • Suzuki, Shiba, 2012. "Stock market booms in economies damaged during World War II," Research in Economics, Elsevier, vol. 66(2), pages 175-183.
    • Handle: RePEc:eee:reecon:v:66:y:2012:i:2:p:175-183
    DOI: 10.1016/j.rie.2012.02.002
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    References listed on IDEAS

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    1. Kim Oosterlinck, 2010. "French Stock Exchanges and Regulation during World War II," ULB Institutional Repository 2013/142702, ULB -- Universite Libre de Bruxelles.
    2. Campbell, John Y., 1999. "Asset prices, consumption, and the business cycle," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 19, pages 1231-1303, Elsevier.
    3. Robert J. Barro, 2006. "Rare Disasters and Asset Markets in the Twentieth Century," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(3), pages 823-866.
    4. Philippe Jorion & William N. Goetzmann, 1999. "Global Stock Markets in the Twentieth Century," Journal of Finance, American Finance Association, vol. 54(3), pages 953-980, June.
    5. Cecchetti, Stephen G & Lam, Pok-sang & Mark, Nelson C, 1990. "Mean Reversion in Equilibrium Asset Prices," American Economic Review, American Economic Association, vol. 80(3), pages 398-418, June.
    6. Oosterlinck, Kim, 2010. "French Stock exchanges and regulation during World War II1," Financial History Review, Cambridge University Press, vol. 17(2), pages 211-237, October.
    7. Shiba Suzuki, 2009. "Risks after disasters: a note on the effects of precautionary saving on equity premiums," Economics Bulletin, AccessEcon, vol. 29(1), pages 328-337.
    8. Emi Nakamura & Jón Steinsson & Robert Barro & José Ursúa, 2013. "Crises and Recoveries in an Empirical Model of Consumption Disasters," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(3), pages 35-74, July.
    9. Lucas, Robert E, Jr, 1978. "Asset Prices in an Exchange Economy," Econometrica, Econometric Society, vol. 46(6), pages 1429-1445, November.
    10. Robert J. Barro & Jose F. Ursua, 2008. "Macroeconomic Crises since 1870," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 255-350.
    11. Francois Gourio, 2008. "Disasters and Recoveries," American Economic Review, American Economic Association, vol. 98(2), pages 68-73, May.
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    Cited by:

    1. Abdulnasser Hatemi-J, 2020. "Bear Markets and Recessions versus Bull Markets and Expansions," Papers 2009.01343, arXiv.org, revised Nov 2020.
    2. Livy, Mitchell R., 2023. "Assessing the housing price capitalization of non-destructive flooding events," Research in Economics, Elsevier, vol. 77(2), pages 265-274.
    3. Keiichi Morimoto & Shiba Suzuki, 2022. "Ambiguity in a pandemic recession, asset prices, and lockdown policy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(5), pages 1039-1070, October.
    4. Suzuki, Shiba, 2018. "Inequality and asset fire sales," MPRA Paper 90906, University Library of Munich, Germany.

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