Crash(redirected from Market Crashes)
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A crash is a sudden, steep drop in stock prices. The downward spiral is intensified as more and more investors, seeing the bottom falling out of the market, try to sell their holdings before these investments lose all their value.
The two great US crashes of the 20th century, in 1929 and 1987, had very different consequences. The first was followed by a period of economic stagnation and severe depression. The second had a much briefer impact. While some investors suffered huge losses in 1987, recovery was well under way within three months.
In the aftermath of each of these crashes, the federal government instituted a number of changes designed to reduce the impact of future crashes.