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Mr. Greenspan said once again that monetary policy was not aimed at lowering stock prices and Ms. Cohen said she remained bullish.
These findings suggest that increases in stock market volatility raise expected and actual stock returns, thus lowering stock prices.
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Mr. Stovall studied retests going back to 1957, and found that the average such event lowered stock prices about 7percentt.
This approach highlights the two contradictory objectives: to lower stock cost and to satisfy customer's demand.
The aim, he says, is to lower stocks and raise cash reserves in case of a liquidity crunch.
If shareholders don't think their agents are doing a good job, they'll sell their stock, lowering the stock price.
Lower stock prices can impede the process.
Lower stock prices have eroded consumer confidence.
And those things led to lower stock prices, which, in turn, led to a crash in capital investment.
Lower stock prices made households poorer and discouraged consumer spending, which then made up three-quarters of the economy.
Service providers are spending less for gear as more competition and lower stock prices reduce access to capital.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com