Please update your browser

You're using a version of Internet Explorer that isn't supported by Questia.
To get a better experience, go to one of these sites and get the latest
version of your preferred browser:

Greenspan Sees Benefits from Sharp Market Drop

THE JOURNAL RECORD, October 3, 1997 | Go to article overview

Greenspan Sees Benefits from Sharp Market Drop


WASHINGTON (AP) -- Federal Reserve Chairman Alan Greenspan told Congress Wednesday the stock market's sharp drop may well prove "a salutary event" and should help extend the economy's 6 1/2-year expansion.

Are stocks still overpriced? "Things are less out of line, certainly, than they would have been," he said as Wall Street's rebound continued.

After months of warnings extending back to his December talk of "irrational exuberance," Greenspan put a positive spin on Monday's wrenching 554-point decline followed by Tuesday's 337-point rebound in the Dow Jones industrial average. "It is quite conceivable that a few years hence we will look back at this episode, as we now look back at the 1987 crash, as a salutary event," he told Congress' Joint Economic Committee. In 1987, the 22.6 percent Black Monday crash -- slightly more than triple Monday's decline in percentage terms -- neutralized inflationary excesses then building in the economy, he said. Monday's drop, provided markets settle down, "should help prolong our 6 1/2-year business expansion," he said. By leaving investors less wealthy, the stock decline should dampen consumer spending, which has fueled unsustainably fast job growth that could lead to inflation. Though U.S. economic growth is robust and inflation low, stocks fell because investors grew too optimistic about future profits, he said. Currency crises in Southeast Asia touched off the drop, but U.S. stocks "were primed to adjust" anyway, he said. "If it was not developments in Southeast Asia, something else would have been the proximate cause for a re-evaluation," he said. The Asian currency turmoil that began in July also should have a "modest but not negligible" impact on the U.S. economy by muting export sales to the region, Greenspan said. He said it was important for the United States and multinational lending agencies such as the International Monetary Fund to help the region. The soothing tone of his remarks couldn't have been more different from his Oct.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Greenspan Sees Benefits from Sharp Market Drop
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.