search query: @author Madsen, J.B. / total: 3
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| Author: | Greasley, D. Madsen, J.B. |
| Title: | Investment and uncertainty: Precipitating the Great Depression in the United States |
| Journal: | Economica
2006 : VOL. 73:291, p. 393-412 |
| Index terms: | investment capital share price volatility uncertainty models USA |
| Language: | eng |
| Abstract: | Between the World Wars, the outbreak of the Great Depression from other investment (hereafter as: inv.) downturns was distinguished by a severe collapse of fixed capital formation. Using a model estimated for the years 1890-2000, it is shown that the expected (here as: exptd.) profitability of capital measured by Tobin's 'q', and the uncertainty surrounding exptd. profits indicated by share price volatility (here as: s-p-vol-ty.) , were the main influences on inv. levels. It is also shown that heightened s-p-vol-ty. played the dominant role in the crucial inv. collapse in 1930. Inv. did not simply follow the downward course of income at the outbreak of the Depression: rather, its slump helped to boost the wider collapse. |
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