Why did the huge decline in stock prices have such an effect


Problem

The 78% drop in the Nasdaq index was actually greater in real terms than the 90% drop in the Dow from 1929 to 1932. Yet the economy suffered only a brief recession and rebounded quickly. Why did this huge decline in stock prices have such a relatively small effect on the US economy in 2001-02 relative to 1929-32?

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Macroeconomics: Why did the huge decline in stock prices have such an effect
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