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- Title
The great margin call: The role of leverage in the 1929 Wall Street crash.
- Authors
Borowiecki, Karol Jan; Dzieliński, Michał; Tepper, Alexander
- Abstract
The reasons for the 1929 Wall Street crash and why it occurred at the particular time that it did are still debated among economic historians. We contribute to this debate by building on a new model, which provides a measure of the financial system's potential for financial crises. The evidence suggests that a tightening of margin requirements in the first nine months of 1929 combined with price declines in September and early October caused enough investors to become constrained that the market was tipped into instability, triggering the sudden crash of October and November.
- Subjects
STOCK Market Crash, 1929; FINANCIAL crises; ECONOMIC history; PRICE cutting; MARGIN requirements; INVESTORS
- Publication
Economic History Review, 2023, Vol 76, Issue 3, p807
- ISSN
0013-0117
- Publication type
Article
- DOI
10.1111/ehr.13213