The What, How, and Why of Stock Market Crashes

In an excerpt from his new book, Yale SOM’s Robert Shiller examines how the stock market rise of the 1920s, the crash of 1929, and the Great Depression that followed came to be seen as a tale of recklessness and divine punishment—and how that narrative still shapes our understanding of the stock market. He explains how the word crash quickly became associated with the one-day stock market drop on October 28, 1929, along with a slightly smaller drop on October 29, 1929, and it became inextricably linked to the Great Depression that followed.