Business Activity and the Boston Stock Market, 1835–1869

Authors: Atack J.; Rousseau P.L.

Source: Explorations in Economic History, Volume 36, Number 2, April 1999 , pp. 144-179(36)

Buy & download fulltext article:

Price: $52.63 plus tax (Refund Policy)

Abstract:

Using annual data, this paper develops new indexes of price performance, dividend yields, and total returns for bank stocks and industrial equities traded on the Boston stock market between 1835 and 1869, a time when it was the nation's premier market for industrials. Using these new series and a set of vector autoregressive models, we conclude that disturbances in the banking sector, as manifested by declines in total returns to bank stockholders, led to increases in short-term lending rates which in turn led to declines in the price performance of traded industrial firms. There is no evidence of feedback from industrial stock returns to bank stock prices via lending rates. The findings are consistent with a key role for banks in 19th-century business fluctuations. Copyright 1999 Academic Press.

Language: English

Document Type: Research article

Affiliations: Vanderbilt University

Publication date: 1999-04-01