Stock Market Wealth Effects and the New Economy: A Cross-Country Study
AbstractThis paper investigates the impact from changes in "new" and "old" economy stock valuations on private consumption. The results from estimating a reduced form VAR for seven OECD countries for the 1990s suggest that the impact from changes in old economy stock valuations on consumption is, in general, larger in countries with market-based financial systems (USA, Canada and the UK) than in countries with bank-based financial systems (continental Europe). Furthermore, the results indicate that the impact from changes in new economy valuations to consumption is roughly the same in the USA, Canada, the UK and in continental Europe. In addition, the results suggest that, in continental Europe, the impact on consumption from changes in the valuation of new economy stocks is bigger than from the old economy stocks, whereas for the Anglo-Saxon countries, the impact is more or less the same between the two sectors. Copyright 2002 by Blackwell Publishers Ltd.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal International Finance.
Volume (Year): 5 (2002)
Issue (Month): 1 (Spring)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1367-0271
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- Simone Salotti, 2010.
"An appraisal of the wealth effect in the US: evidence from pseudo-panel data,"
Working Papers - Mathematical Economics, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa
2010-06, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
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- Salotti, Simone, 2009. "Wealth effect in the US: evidence from brand new micro-data," MPRA Paper 17732, University Library of Munich, Germany.
- Salotti, Simone, 2008. "Global imbalances and household savings: the role of wealth," MPRA Paper 17729, University Library of Munich, Germany, revised 2009.
- Nicholas Apergis & Stephen M. Miller, 2004. "Consumption Asymmetry and the Stock Market: Further Evidence," Working papers, University of Connecticut, Department of Economics 2004-19, University of Connecticut, Department of Economics.
- Tamim Bayoumi & Hali Edison, 2003. "Is Wealth Increasingly Driving Consuption?," DNB Staff Reports (discontinued), Netherlands Central Bank 101, Netherlands Central Bank.
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