The stock market bubble of 1929: evidence from closed-end mutual funds

Abstract

The sharp rise and subsequent crash of stock prices in 1929 is perhaps the most striking episode in the history of American financial markets. The nominal S & P composite index rose sixty-four percent from January 1928 to September 1929, fell thirty-three percent from September 1929 to December 1929, recovered about halfway to its 1929 peak, and then fell again to a low point in the summer of 1932 sixty-six percent below its December 1929 level and seventy-seven percent below its September 1929 average (see figure 1).