Causes Of The Great Depression And The Stock Market Crash

A stock marketing crash is a sudden sharp drop in stock prices across a majority of the stock market. Humanity is being confronted with the same problems as those at the end of the second industrial revolution such as decreasing stock exchange rates, highly increasing unemployment, towering debts of companies and governments and bad financial positions of banks.

Not only is the stock market not even remotely discounting the underlying economic reality, but the S&P 500┬áspent the last four weeks clawing back 78% of the 249 point (12%) drop that occurred just after New Year’s despite the continued plethora of increasingly negative economic reports.stock market crash

The years preceding the stock market crash of 1929 were filled with irrational exuberance Stock prices had risen across the board, even for companies that posted little profit , and investors were very optimistic that the general upward trend of the market and the economy would continue for some time.

Perhaps surprisingly, both Kezdi and Willis (2008) and Gouret and Hollard (2010) find no relationship between personal characteristics and the propensity to give problematic answers, with the potential exception of income and expectations themselves.stock market crash

We estimate the effect of the crash on the population average of expected returns, the population average of the uncertainty about returns (subjective standard deviation), and the cross-sectional heterogeneity in expected returns (an indicator of disagreement).stock market crash