New Eras and Bubbles
around the World

Large stock market moves like the U.S. examples I discussed in the last chapter have also occurred in many other countries over the years, affording us numerous other observations. These suggest that speculative bubbles—periods of exaggerated but temporary investor enthusiasm, often associated with “new era” theories—are in fact commonplace.

In this chapter, I examine the largest recent stock market moves around the world. For some of these, I rely on accounts by the news media. Of course, media accounts are not always reliable, and I cannot claim to have done exhaustive research on any of these examples. However, they illustrate the significance in these countries of factors I have identified in previous chapters as important in U.S. stock market moves. I show that the record price movements in these countries have tended to be reversed afterward—as one would expect if bubbles were common among them.

The Largest Recent Stock Market Events

Table 6.1 shows the twenty-five largest recent (until 1999) one-year real stock price index increases for thirty-six countries, and Table 6.2


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Irrational Exuberance


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