Stock Market Crashes Of 1929 & 1987

Compares causes & economic effects of two crashes. Discusses panic, investors’ attitudes, recession & depression, role of govt. in the crashes & aftermaths and market corrections.

The purpose of this paper is to compare the causes and economic effects of the U.S. stock market crashes in 1929 and 1987.
On October 26, 1987, the U.S. stock market experienced the second Black Monday in its history. The Dow Jones Industrial Average plunged 508 points, the most severe decline ever recorded. The 22.6 percent loss raised the specter of the crash of 1929, which precipitated the Great Depression of the 1930s. As analysts were quick to point out, the losses in the 1987 crash were twice as severe as the 12.8 percent losses in 29 that prompted many Wall Street investors to jump out of windows. (Fortunately, as several cynical wags pointed out, most windows in today’s skyscrapers can’t be opened.) While people weren’t taking quick exits out their windows following the 87 crash,(…)

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