Home Runs and Dow Jones

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The greatest World Series of all time is over,_and baseball now takes its rightful place again as the national pastime. Baseball is played by people of.average height and weight, often of average speed and muscle strength and is the favorite sport for parents to play with their kids. But for a while the World Series was displaced by the Super Bowl as the premier sporting -event, at least as measured by TV ratings. The shift to baseball is a reflection of the renewed emphasis on normal everyday life.

Even so, I think the emphasis on home runs in baseball in recent years_is deplorable. They reflect a tendency to try to win with the quick fix. Quick fixes are not healthy, for base- ball or for the economy.

Laurel Kenner and I have looked into the relationship between home runs and the economy. We have found a -0.2 correlation between the change in the number of home runs in any five year period and the performance of the Dow in the next five years. Note that 1900-1919, and 1950-1979, the two eras of scientific baseball, were followed by the greatest rises of all time, and conversely that 1920-1929, and 1990- 2000 were followed by disaster on Wall Street.

This is no coincidence.

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