The Great Crash of 1929: A Look Back After 90 Years

Bruner, Robert F.; Miller, Scott C.

doi:10.1111/jacf.12374

Cited by 2 publications

(3 citation statements)

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“…New technology, innovative practices in manufacturing, expansion of industrialization, increase in the range of goods offered, growth in consumerism, market development, credit growth, and a radical change in lifestyle contributed -to the extent that each of these factors ultimately accounted for -to the view that this decade would have been a decade of growth. However, the overall growth construct was not stable as the world was coming out of World War I, still trying to recover from its tragic consequences (Bruner & Miller, 2019). As stated by Schmidt (2019), the countries involved or affected by WWI had to face significant challenges that included hyperinflation, unstable political conditions, huge reconstruction costs and reparation payments.…”

Section: The Great Crash Of 1929 and The Great Depressionmentioning

confidence: 99%

“…Following actions of massive stock purchases by banks were not capable of saving the downfall of the economy, with the results being soon evident worldwide (Charles &Darné, 2014). As stated by Bruner and Miller (2019), the rapid growth that preceded the Great Crash of 1929, and which has been characterized by economists and researchers as a great "bubble" that resulted from speculative actions, may simply have been the result of the great industrial revolution of the time. Nevertheless, the Great Crash was inevitable and triggered a series of events that led to the Great Depression.…”

Section: The Great Crash Of 1929 and The Great Depressionmentioning

confidence: 99%

“…Nevertheless, the Great Crash was inevitable and triggered a series of events that led to the Great Depression. Also, it was partly the cause of serious changes in public policy that, eventually, led to the recession (Bruner and Miller, 2019).…”

Section: The Great Crash Of 1929 and The Great Depressionmentioning

confidence: 99%

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Possible Social, Political, and Economic Implications of Major Events

Kiki¹,

Metsiou²,

Papachristou³

et al. 2023

Int. J. Res. Publ. Rev.

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The article examines the available literature of theoretical as well as empirical scope regarding the origins and aftereffects of banking crises and summarizes the insights drawn from relevant policies adopted as interventions to address these crises and limit their impact at the microeconomic and macroeconomic levels.While originating from a variety of causes, banking crises share common patterns, since their roots can be traced back to unsustainable macroeconomic policies, market failures, regulatory distortions, and government intervention in capital allocation; such crises are frequently described by cycles of credit and asset priceexplosions and declines -and generally are addressed mainly via government intervention on a broad range of policies. When not handled efficiently and quickly, banking crises tend to impose huge costs on society by restricting the flow of credit to the real economy. Many of the possible proposals to strengthen the economic stability in an increasingly integrated financial system include making banking regulation more prudential in macroeconomics, by focusing on cycle and systemic risk rather than individual bank risk. Furthermore, by improving market discipline by limiting explicit and implicit government bank liability insurance. The global financial crisis that began in 2007 caught many by surprise, because what at first appeared to be a crisis sustained in the USA concerning subprime loans, quickly spread to financial markets around the world, triggering a large-scale government bailout activity in the financial sector, causing memories of previous crises to fade under a prolonged period of economic prosperity. When the crisis broke out, it developed at breakneck speed, infecting most financial markets around the world. Banking crises are like periodic waves that emerge unexpectedly and can destroy the real economy by restricting credit and causing costly clearances. Banking crises have been a frequent occurrence throughout history, counting almost 300 banking crises in the period 1800 to 2008.There are many commonalities between the current crisis and previous crisis episodes. Usually, banking crises are preceded by credit booms and asset price bubbles and are accompanied by intervention by the government in rescuing its finances. Although the timing of the bursting of such crises is uncertain, the burst of a crisis is many times inevitable.

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Section: The Great Crash Of 1929 and The Great Depressionmentioning

confidence: 99%

Section: The Great Crash Of 1929 and The Great Depressionmentioning

confidence: 99%

See 1 more Smart Citation

Possible Social, Political, and Economic Implications of Major Events

Kiki¹,

Metsiou²,

Papachristou³

et al. 2023

Int. J. Res. Publ. Rev.

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The First Modern Financial Crises: The South Sea and Mississippi Bubbles in Historical Perspective

Bruner

Miller

2020

J Applied Corp Finance

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The twin South Sea and Mississippi bubbles of 1720 inaugurated the new age of modern finance. Both of the then recently launched British and French stock markets experienced manic run‐ups and crashes that shook their societies to their cores. While the historical consensus attributes these market bubbles to, in the words of John Kenneth Galbraith, “insanity born of optimism and self‐serving illusion,” the authors present a more nuanced view. Whatever their role in the bubbles, human folly and greed in this account are not allowed to obscure the powerful influences of institutions, interests, ideologies, and government policies both in giving rise to the crises, and in responding to them. The authors draw on past work and recent analysis to answer questions like the following: Were the market manias of 1719‐20 in fact irrational “bubbles?” If not just fear and greed, what triggered the crashes in 1720? Did political and financial leaders respond appropriately? And how did the resolutions of these crises affect the future financial and economic development of the two nations? In viewing the twin crises of 1720 from a broad historical perspective, the authors' aim is to discover and articulate a more general rule about the role of modern financial crises in “bending the arc” of history. Although powerful states and financial authorities have the potential to accelerate valuable innovations that end up increasing national productivity and wealth, such entanglements of politics and commerce are also liable to catastrophic outcomes, both in laying the grounds for crises and then in responding to them with misguided regulation. The effectiveness and long‐run consequences of such state interventions in commerce are shown to depend on the strength and soundness of a nation's political and social institutions. In unstable and inefficient regimes, which are likely to experience misguided interventions in the first place, the social ramifications can be profoundly destructive. The flawed but effective British reaction to its 1720 crisis—and to the series of banking crises that followed in the 19th century—worked to mollify and win over public opinion, and thus contribute to Britain's continued embrace of financial institutions. By contrast, the outrage of the French populace at the corruption led to the abandonment of modern financial institutions and practices for nearly a century, and to a vilification of banks and bankers that persists to this day, all with major consequences for French productivity and wealth.

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The Great Crash of 1929: A Look Back After 90 Years

Cited by 2 publications

References 53 publications

Possible Social, Political, and Economic Implications of Major Events

Possible Social, Political, and Economic Implications of Major Events

The First Modern Financial Crises: The South Sea and Mississippi Bubbles in Historical Perspective

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