The stock market crash transmitted to the real economy through an uncertainty mechanism: because 1920s borrowing depended on the perception that times were improving (with the stock market as the index of that), the crash triggered an immediate collapse in consumer spending and borrowing, visible in plummeting new automobile registrations through 1930.
causalpending
Speaker
Eric RauchwayEvidence Quote
“Then then you you have an immediate transfer via this uh uncertainty mechanism to what we we call the real economy right now.”
Created: 6/17/2026, 10:09:28 AM
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