New test reveals U.S. stock market bubbles, impacting investors worldwide.
The article explores whether there are speculative bubbles in the U.S. stock market by comparing market value to fundamental value. The researchers review existing tests and introduce a new method to analyze stock market data from over a century. They find evidence of stock price bubbles in both annual and post-war monthly data, with the post-war period showing positive bubbles and the annual data revealing some negative bubbles.