University lecturer lifts the lid on the infamous 1920s ‘boom and bust’ period in new book

University of Buckingham economics lecturer Ali Kabiri has lifted the lid on the infamous 1920s ‘boom and bust’ period in a fascinating new book.

The Great Crash of 1929: A Reconciliation of Theory and Evidence looks at the many changes in the post-World War One period such as the housing boom, new theories on finance and stock pricing models, high inflation rates and increases in the money supply and a technology boom.

It was the most infamous ‘boom and bust’ episode in modern history and one which is again the subject of heated debate as the field of economics clashes over the presence of asset bubbles and their implications for economic policy.

With new data and more than 100 years of stock market returns, the actual models used by investors, together with new findings from modern research, Ali Kabiri offers the reader the chance to see what drove stocks so high and then caused them to crash. He thoroughly re-examines all the unanswered questions on 1929 and he allows the reader to understand the changes which led to the 1920s stock market boom and the 1929 crash. He probes the key issue of whether 1929 was a bubble or not, and which part of the bubble, if present, could have been anticipated.

The Great Crash of 1929 is an ideal resource for those interested in financial history, historical finance, behavioural economics, financial markets and the history of economic thought.

Dr Kabiri, who spent five years researching the book, said: “Asset bubbles, when financial and commodity markets boom and crash, are a hotly debated topic which affect society. Can they be seen during the event or can we only see them in hindsight? We are now over eighty years past the infamous crash and the book is the first major attempt to measure if a bubble occurred in 1929 and its causes using the financial theories and models of the time and modern techniques. The book aims to resolve the ‘efficient markets hypothesis’ vs ‘irrational exuberance’ debate for this infamous boom and crash.”

Dr Ali Kabiri  has been a Visiting Research Scholar at Yale School of Management, Columbia Business School and Rutgers in the USA. He is currently deputy director of the Institute for International Monetary Research at Buckingham and a research associate at the LSE Financial Markets Group (FMG).