Case | HBS Case Collection | August 2007 (Revised December 2010)

Trouble with a Bubble

by Tom Nicholas


Examines technology, firm performance, and the stock market during the 1929 Great Crash and the Great Depression of the 1930s. The 1920s was an extraordinary period of technological progress marked by a strong run-up in stock market prices. Firms invested heavily in R&D and human capital, while mass production and scientific management techniques were extensively adopted. Narrates the history of the 1920s and 1930s through the life of Irving Fisher, a prominent academic, investor, technologist, and market commentator who claimed that innovation was driving equity prices higher. Analyzes why Fisher believed that the high level of the stock market was justified, and his explanations for why the stock market crashed. Further explores the 1930s, marked by mass unemployment and social distress on the one hand, and entrepreneurship and innovation on the other. Fisher's views provide a conduit for examining the dynamics of stock market behavior and economic performance during one of the most significant periods in U.S. economic and financial history.

Keywords: Technology; Organizational Change and Adaptation; History; Financial Markets; Performance; Labor and Management Relations; Equity; Financial Crisis; Innovation and Invention; United States;


Nicholas, Tom. "Trouble with a Bubble." Harvard Business School Case 808-067, August 2007. (Revised December 2010.)