Campbell, John Y.; Polk, Christopher; Giglio, Stefano - National Bureau of Economic Research (NBER) - 2010
This paper shows that the stock market downturns of 2000-2002 and 2007-09 have very different proximate causes. The early 2000's saw a large increase in the discount rates applied to corporate profits by rational investors, while the late 2000's saw a decrease in rational expectations of future...