Speculation-stocks had become over valued Mismatch of Buyers and Sellers-on the day of the crashes the number of sellers was far greater than the.

Speculation-stocks had become over valued

Mismatch of Buyers and Sellers-on the day of the crashes the number of sellers was far greater than the number of buyers

Higher Trading Volume-Both times many stocks changed hands

The economy of 1929 had already entered a period of contraction before the crash

The economy of 1987 had been expanding since 1982

Because of this expansion in 87’, the economy may have been more resilient and stronger

Between 1930 and 1933 over nearly 10,000 banks closed their doors and money supply fell by 31 percent

Contraction of the money supply was also compounded by the actions of the Federal Reserve, which fearing rapid credit expansion, began to tighten its monetary policy

Bank loans were called in due to liquidity pressures

Businesses had a hard time getting finance for their operations

In 1987 the Federal Reserve injected liquidity into the market and there was additional help from the Federal Deposit Insurance Corporation

Gold Exchange Standard in the 1930’s made economic conditions in various countries closely related

Beggar-Thy-Neighbor trade policies lead to protectionism during the great depression

In the 1980’s International trade was beginning to take off. Markets were being opened revealing many new opportunities for investors and businesses

Kenneth Galbraith Wrote, “on the whole, the great stock market crash can be much more readily explained than the depression that followed it. And among the problems involved in assessing the causes of the depression none is more intractable than the responsibility to be assigned to the stock market crash.”

-The Great Crash:1929

There is still a debate about concerning which factors caused the depression and how much weigh each factor should be given

The Great Crash by J.K. Galbraith U.S. Market Crashes by J.D. Stiver Achieving Economic Stability: Lessons

From the Crash of 1929 by G.H. Stern (Federal Reserve)