Stock Market Boom and the Productivity Gains of the 1990s

Urban Jermann and Vincenzo Quadrini

No 9034, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Together with a sense of entering a New Economy, the US experienced in the second half of the 1990s an economic expansion, a stock market boom, a financing boom for new firms and productivity gains. In this paper, we propose an interpretation of these events within a general equilibrium model with financial frictions and decreasing returns to scale in production. We show that the mere prospect of high future productivity growth can generate sizable gains in current productivity, as well as the other above mentioned events.

JEL-codes: E23 G14 (search for similar items in EconPapers)
Date: 2002-06
New Economics Papers: this item is included in nep-dge, nep-fin and nep-fmk
Note: EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published as Jermann, U. J. and V. Quadrini. "Stock Market Boom and the Productivity Gains of the 1990s." Journal of Monetary Economics (March 2007): 413-432.

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Journal Article: Stock market boom and the productivity gains of the 1990s (2007)
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