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The Recent Ascent in Stock Prices: How Exuberant Are You?

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It has been almost three years since Chairman Greenspan posed the foregoing question and thereby launched the phrase “irrational exuberance” into the economic idiom. Since then, of course, some stock-price indexes have doubled, and the question still remains unanswered. Over the same period, favorable U.S. economic performance continued to surprise even some of the more optimistic prognosticators. Because stock prices are presumably forward looking, earlier exuberance appears, at least up to this point, to have been validated by experience.

It has been almost three years since Chairman Greenspan posed the foregoing question and thereby launched the phrase “irrational exuberance” into the economic idiom. Since then, of course, some stock-price indexes have doubled, and the question still remains unanswered. Over the same period, favorable U.S. economic performance continued to surprise even some of the more optimistic prognosticators. Because stock prices are presumably forward looking, earlier exuberance appears, at least up to this point, to have been validated by experience.


Suggested citation: Carlson, John B., 1999. "The Recent Ascent in Stock Prices: How Exuberant Are You?" Federal Reserve Bank of Cleveland, Economic Commentary, 08.15.1999.

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