Five Financial Eras

83 Pages Posted: 15 Apr 2024 Last revised: 9 May 2024

Date Written: April 1, 2024


This paper presents an analysis of financial history over the past eight centuries by breaking the past up into five historical eras and twenty historical periods. There is a pattern of high equity returns being followed by periods of low equity returns that has existed over the past 400 years. Similar patterns at different intervals have been found for fixed income. This process produces different equity risk premia in different periods. The paper presents evidence on the factors that define the beginning and end of each period and why the returns in one period differ from the next. Each period is separated by geopolitical events, such as the end or beginning of a war (1815, 1914, 1945), a stock market bubble (1720, 1929, 2000), a secular low or high in interest rates (1896, 1981, 2020) or similar events. These events signal a change in the zeitgeist of the period and consequently a change in the returns to stocks, bonds, bills and the equity risk premium. For each period, documentation is provided on wars, trade, the government, returns to stocks and bonds, inflation, bear markets, financial crises, interest rates and exchange rates. An understanding of the factors influencing financial eras and periods will improve our understanding of the returns to stocks, bonds and bills and the equity risk premium in the future.

Keywords: Equity Risk Premium, International Business Cycles, Financial Markets, Stock Market, Investment Returns, Government Regulation, Bull and Bear Markets

JEL Classification: E32, E44, G15, G28, N20

Suggested Citation

Taylor, Bryan, Five Financial Eras (April 1, 2024). Available at SSRN: or

Bryan Taylor (Contact Author)

Global Financial Data ( email )

29122 Rancho Viejo Rd. Suite 215
San Juan Capistrano, CA 92675
United States
9495424200 (Phone)


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