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<< Read To Log Or Not To Log, Part III

<< Read  To Log Or Not To Log, Part IV

The Shanghai stock market has undergone some wild gyrations over the last year… and back in 2008. Following up on To Log or Not to Log, Part IV:

Here’s the picture, as usually depicted.

Figure 1: Shanghai composite stock market index, end of month close. August observation is for 8/26. Source: Quandl.

The movements look a bit different (but still scary) in logs.

Figure 2: Log Shanghai composite stock market index, end of month close. August observation is for 8/26. Source: Quandl and author’s calculations.