The Stock Market, Profit, and Investment
Olivier Blanchard (),
Changyong Rhee and
The Quarterly Journal of Economics, 1993, vol. 108, issue 1, 115-136
Should managers, when taking investment decisions, follow the signals given by the stock market even when those do not coincide with their own assessment of fundamentals? Do they? In this paper we review theoretical arguments and examine the empirical evidence. First, we look at the relation between investment, market valuation, and proxies for fundamentals over the last 90 years. Second, we look at the behavior of investment during the episodes associated with the crashes of 1929 and 1987. We find a limited role of market valuation, given fundamentals.
References: Add references at CitEc
Citations: View citations in EconPapers (180) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
Working Paper: The Stock Market, Profit and Investment (1990)
Working Paper: THE STOCK MARKET, PROFIT AND INVESTMENT (1990)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:oup:qjecon:v:108:y:1993:i:1:p:115-136.
Access Statistics for this article
The Quarterly Journal of Economics is currently edited by Robert J. Barro, Elhanan Helpman, Lawrence F. Katz and Andrei Schleifer
More articles in The Quarterly Journal of Economics from Oxford University Press
Bibliographic data for series maintained by Oxford University Press ().