The Information Technology Revolution and the Puzzling Trends in Tobin’s average q
Adrian Peralta-Alva ()
Macroeconomics from University Library of Munich, Germany
Abstract:
A growing literature argues that the Information Technology rev- olution caused the stock market crash of 1973-1974, its subsequent stagnation and eventual recovery. This paper employs general equi- librium theory to test whether this good news hypothesis is consistent with the behavior of US equity prices and with the trends in corpo- rate output, investment and consumption. I …nd it is not. A model based exclusively on good news can make equity prices fall as much as in the data but it must also imply a strong economic expansion right when the US economy stagnated. However, when the observed productivity slowdown in old production methods is incorporated into the model consistency with major macroeconomic aggregates can be achieved and a 20% drop in equity values can be accounted for. (JEL E44, O33, O41)
Keywords: Information Technology Revolution; Stock Market; Productivity Slowdown; Tobin's q; 1974; Crash (search for similar items in EconPapers)
JEL-codes: E44 O33 O41 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2005-11-03
New Economics Papers: this item is included in nep-dge, nep-ict and nep-mac
Note: Type of Document - pdf; pages: 35
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://econwpa.ub.uni-muenchen.de/econ-wp/mac/papers/0511/0511007.pdf (application/pdf)
Related works:
Journal Article: THE INFORMATION TECHNOLOGY REVOLUTION AND THE PUZZLING TRENDS IN TOBIN'S AVERAGE "q" (2007)
Working Paper: The Information Technology Revolution and the Puzzling Trends in Tobin’s average q (2005) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0511007
Access Statistics for this paper
More papers in Macroeconomics from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ( this e-mail address is bad, please contact ).