The stock market may be ahead of the economy. That suggests a crash is more likely than a second recession.

There are many ways to value equity markets. A simple one is to compare an index to nominal gross domestic product. What ratio counts as high is a matter of debate, but 1995 is a good starting point. The Dow Jones industrial average first climbed above 4,000 in February 1995, which was then almost 50 percent above its 1987 peak. It was 38 percent below the level of December 1996, when Alan Greenspan warned of irrational exuberance.

If the market’s value had increased in line with nominal G.D.P. since 1995, the Dow would be 105 percent higher, at 8,200 today. If that sounds low, consider that inflating the Dow’s bear market low of 777 points in August 1982 gives it a current level of 3,600.

Even after its recent decline, the market remains far above these levels. The performance certainly owes nothing to superior economic prospects. Rather, ultralow interest rates together with increased leverage inflated corporate profits over the years.