Bubbles, Booms and Crashes in the US Stock Market 1792-2024

William Goetzmann, Otto Manninen and James Tyler

No 34903, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine the historical frequency of stock market booms, crashes, and bubbles in the United States from 1792 to 2024 using aggregate market data and industry-level portfolios. We define a bubble as a large boom followed by a crash that reverses the market’s prior gains. Bubbles are extremely rare. We extend the industry-level analysis of Greenwood, Shleifer, and You (2019) through 2024 and replicate their findings out of sample using Cowles Commission industry data from 1871 to 1938. Booms do not reliably predict crashes, but they do predict higher subsequent volatility, increasing the likelihood of both large gains and large losses.

JEL-codes: G1 G10 G12 G4 (search for similar items in EconPapers)
Date: 2026-02
Note: AP
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