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Chicago Fed Letter, No. 15, November 1988
Bubble, Bubble, Toil & Trouble

The October 19th stock market crash spilled more printer's ink than any other economic event of the 1980s, yet by all accounts the economy hardly noticed. The real economy just kept growing. Real GNP growth actually exceeded 6% on an annual basis in the quarter the Crash occurred and has remained above 3% since. Unemployment as of September stands at 5.4%, more than half a point lower than it did on October 19, 1987. In fact, ignoring the carnage on Wall Street, the Crash's major impact may have been to dampen slightly a somewhat overexuberant economy.

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