Boyan Jovanovic [*]
This article reviews my work on the relationship between technological change and the stock market. My co-authors in this area are Jeremy Greenwood, Bart Hobijn, and Peter L. Rousseau. The papers that we have written so far are listed at the end of this article.
Creative Destruction in the Stock Market
Figure 1 shows that U.S. stock market capitalization has risen relative to GNP by a factor of about 12 over a 113-year period. On the other hand, business debt -- bank loans and corporate bonds -- begins and ends the period at about 40 percent of GNP, which implies that the debt-equity ratio has fallen by a factor of 12.
Although the long-run ...