Definition, Examples,Cause,Impact

On September 20, the London Stock Exchange crashed when top British investor Clarence Hatry and many of his associates were jailed for fraud and forgery. In order to see if the stock market crash brought about changes in expectations about stock market returns, we estimate simple OLS regressions with crude proxies for the subjective mean (μi) the subjective standard deviation (σi) and the heterogeneity of expectations.

Simple mathematics reduces a credit-worthy company to bankruptcy — for example a company with a market capitalization of $50 million owing $9 million suddenly becomes a bad risk when its total value dives to $10 million thanks to the sudden switch from profit to loss caused by the fall in the price of oil.

Academics see the Wall Street Crash of 1929 as part of a historical process that was a part of the new theories of boom and bust According to economists such …