ECON 2200 Chapter Notes - Chapter 22-23: Economic Bubble, Discount Window, Market Trend
9 Feb 2017
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The stock market: boom (p. 415-420 in chap 22) and bust (p. 424-427 in chap 23) Please read on your own (p. 415-416): speculative mood of the times; stock market boom preceded by: the (original) ponzi scheme, the florida real estate bubble. Boom: the great bull market (table 22. 7: 1920s: individual income and wealth rose. An emerging middle class (whose disposable income increased: business conditions were strong and earnings were up (especially for firms in consumer durables industry) Dividends rose % of firm profits that are distributed as dividends to share holders. stock prices rose (capital gains: stock became an increasingly attractive asset, as shown by table 22. 7. 1926-1928: s&p common index up by 58% Prices for most stocks increased consistently throughout the 1920s, but the price increases were particularly rapid in 1928-1929: however, stock prices rose faster than earnings. (see econ insight 22. 1 & table.
