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Consumption asymmetry and the stock market: Empirical evidence

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  • Apergis, Nicholas
  • Miller, Stephen M.

Abstract

This paper examines whether U.S. stock-market wealth asymmetrically affects consumption. After identifying asymmetric behavior for consumption and stock market wealth, the results confirm that stock-market wealth asymmetrically affects real per capita consumption. Negative 'news' affects consumption more than positive 'news'.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 93 (2006)
Issue (Month): 3 (December)
Pages: 337-342

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Handle: RePEc:eee:ecolet:v:93:y:2006:i:3:p:337-342

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Web page: http://www.elsevier.com/locate/ecolet

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References

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  1. Laurence Boone & Claude Giorno & Pete Richardson, 1998. "Stock Market Fluctuations and Consumption Behaviour: Some Recent Evidence," OECD Economics Department Working Papers 208, OECD Publishing.
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Citations

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Cited by:
  1. Mansor H. Ibrahim & Muzafar Shah Habibullah, 2010. "Stock market and aggregate consumption asymmetry: evidence from Malaysia," Studies in Economics and Finance, Emerald Group Publishing, vol. 27(1), pages 19-29, March.
  2. Mauro Mastrogiacomo, 2006. "Testing consumers' asymmetric reaction to wealth changes," CPB Discussion Paper 53, CPB Netherlands Bureau for Economic Policy Analysis.
  3. Goodness C. Aye & Rangan Gupta & Mampho P. Modise, 2012. "Do Stock Prices Impact Consumption and Interest Rate in South Africa? Evidence from a Time-Varying Vector Autoregressive Model," Working Papers 201224, University of Pretoria, Department of Economics.
  4. B Harrison & W Moore, 2010. "Stock Market Co-Movement in the Caribbean," Economic Issues Journal Articles, Economic Issues, vol. 15(1), pages 1-15, March.
  5. Kitamura, Yoshihiro, 2009. "The current account and stock returns," Research in International Business and Finance, Elsevier, vol. 23(3), pages 302-321, September.
  6. Mohsen Bahmani-oskooee & Hadise Fariditavana, 2014. "Do Exchange Rate Changes have Symmetric Effect on the S-Curve?," Economics Bulletin, AccessEcon, vol. 34(1), pages 164-173.
  7. Casadio, Paolo & Paradiso, Antonio, 2010. "Inflation and consumption in a long term perspective with level shift," MPRA Paper 25980, University Library of Munich, Germany.
  8. Chen, Nan-Kuang & Chen, Shiu-Sheng & Chou, Yu-Hsi, 2010. "House prices, collateral constraint, and the asymmetric effect on consumption," Journal of Housing Economics, Elsevier, vol. 19(1), pages 26-37, March.
  9. Gupta, Rangan & Modise, Mampho P., 2012. "South African stock return predictability in the context data mining: The role of financial variables and international stock returns," Economic Modelling, Elsevier, vol. 29(3), pages 908-916.
  10. Márquez, Elena & Martínez-Cañete, Ana R. & Pérez-Soba, Inés, 2013. "Wealth shocks, credit conditions and asymmetric consumption response: Empirical evidence for the UK," Economic Modelling, Elsevier, vol. 33(C), pages 357-366.
  11. Holmes, Mark J. & Shen, Xin, 2013. "A note on the average propensity to consume, wealth and threshold adjustment," Economic Modelling, Elsevier, vol. 35(C), pages 309-313.

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