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On Wednesday, October 14, , the U. Questions about the crash fall into two main groups.

First, what fundamental economic factors triggered the large stock-market decline? Second, what institutional and structural factors inherent in the trading strategies of investors and the market structures of the equities, futures, and options markets exacerbated the decline? This paper addresses the first question. Surprisingly, none of the numerous market crash studies document that the October 14—16 decline exceeds any one-, two-, or three-day decline since May 13—14, , when German forces broke through the French armies.

AQR - Triggering the Stock Market Crash

Given the size of the October 14—16 decline and the possibility that it triggered the crash, a study of the crash is not complete without understanding the source of this precrash decline. Several events and economic conditions are candidates, but we focus on proposed tax changes restricting takeovers introduced in the House Ways and Means Committee on the evening of October 13 and approved on the evening of October The bill would have limited tax deductions for the interest on debt used to finance takeovers as well as other tax advantages associated with changes in corporate control.

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The information contained herein is only as current as of the date indicated, and may be superseded by subsequent market events or for other reasons.

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Library Journal Articles Triggering the Stock Market Crash. Add to Reading List. Triggering the Stock Market Crash.

Mitchell , Jeffry Netter Topic: Other Research Journal of Financial Economics On Wednesday, October 14, , the U. Certain publications may have been written prior to the author being an employee of AQR.

Arbitrage Crashes and the Speed of Capital Measuring Systemic Risk Stock Repurchases and Insider Transactions in the Wake of the Stock Market Crash.

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