Hi, this question popped into my mind while learning for a macroeconomics exam. Suppose there is a stock market crash. Why does it matter to real economy? For example, if all stock prices drop by half suddenly, everyones wealth would be halved, but that would be only numbers in accounting sheets. No real money even needed to change hands. If someone had 1000USD and bought one stock and then crash came, he would have 500USD. The only effect would be money transfer from the current owner to the previous owner. So basicaly as I understand it, stock crashes just tranfer wealth from one group of stock-market participants to other. Who really cares about that?