Graduation Year

2024

Date of Submission

4-2024

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Professor Richard Burdekin

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Terms of Use for work posted in Scholarship@Claremont.

Abstract

The dot-com bubble and post-pandemic rises in asset prices share many characteristics on the surface like being driven by novel technologies and accompanied by easy monetary policy. However, the two periods also experience different factors. In my paper, I investigate the effects of changes in liquidity—money supply and interest rates—on stock returns across the two periods. I include Bitcoin returns as well as stocks for the most recent episode. My main finding is that the liquidity variables have significant effects on Nasdaq returns in both periods. My thesis builds upon prior research on the impact of liquidity variables on financial markets to show more nuanced effects of changes in liquidity on financial markets and firms of different industries during tech-driven bubble phases.

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