Figure 1 presents a bird’s-eye view of the evolution of asset prices and the economy from 1970 to 2003 for three of these economies, the United States, the United Kingdom, and Japan.9 For each country, the top panel of the figure shows the evolution of an aggregate inflation-adjusted index of asset prices - which consists of an average of stock prices and residential and commercial real estate prices.
The shaded areas cover recession periods, as determined by the business cycle dating committee of the National Bureau of Economic Research in the United States, and a comparable  7  See, for example, Lubos Pastor and Pietro Veronesi (2004), “Was There a Nasdaq Bubble in the Late 1990s?” NBER Working Paper Series 10581 (Cambridge, Mass. : National Bureau of Economic Research, June).