The World Market for Bonds and Stocks

Robert Z. Aliber
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Robert Z. Aliber: University of Chicago

Chapter 18 in The New International Money Game, 2011, pp 260-267 from Palgrave Macmillan

Abstract: Abstract One way to answer these questions is to rely on anecdotes, and particularly the stories of the market participants. An alternative approach is to rely on economic intuition. A third is to scan the data. The answers to both questions are more ambiguous than they seem. Consider the answer to the second question at the end of 1989. Investors who owned Japanese shares had a much higher rate of return than investors who owned shares of firms headquartered in other industrial countries over the previous 10 years, the previous 20 years, and even the previous 30 years. The high rates of return on Japanese stocks reflected primarily the sharp increase in prices of stocks traded in Tokyo; Americans and other non-Japanese that owned these stocks had an even higher rate of return because the yen had appreciated by an average annual rate of 4–5 percent a year between 1970 and 1989.

Keywords: Interest Rate; Stock Market; Stock Exchange; Stock Prex; Foreign Currency (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-24672-0_19

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DOI: 10.1057/9780230246720_19

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