The Effect of stock market wealth on private consumption in Zimbabwe
AbstractThe study seeks to examine stock market wealth effects on private non-durable consumption for Zimbabwean households using quarterly data from 1994(1) to 2008(2). The bounds testing approach to cointegration is employed to test the long run relationship between stock market wealth and consumption. An autoregressive distributed lag model (ARDL) analysis is implemented to examine the relationship among the variables both in the short-run and the long run. The empirical findings suggest significant wealth effects for Zimbabwe, a developing country. This contradicts the commonly held view that LDCs should have insignificant wealth effect since the financial system is still underdeveloped. The dynamic short run error correction model also shows a speedy convergence to long run equilibrium.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Technological Educational Institute (TEI) of Kavala, Greece in its journal International Journal of Economic Sciences and Applied Research (IJESAR).
Volume (Year): 4 (2011)
Issue (Month): 2 (August)
wealth effects; consumption dynamics; income effect; convergence;
Find related papers by JEL classification:
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paresh Kumar Narayan & Russell Smyth, 2006.
"Dead man walking: an empirical reassessment of the deterrent effect of capital punishment using the bounds testing approach to cointegration,"
Taylor & Francis Journals, vol. 38(17), pages 1975-1989.
- Russell Smyth & Paresh Kumar Narayan, 2004. "Dead Man Walking: An Empirical Reassessment of the Deterrent Effect of Capital Punishment Using the Bounds Testing Approach to Cointegration," Econometric Society 2004 Australasian Meetings 332, Econometric Society.
- Paresh Narayan & Russell Smyth, . "Dead Man Walking: An Empirical Reassessment of the Deterrent Effect of Capital Punishment Using the Bounds Testing Approach to Cointegration," American Law & Economics Association Annual Meetings 1028, American Law & Economics Association.
- Monica Paiella, 2004.
"Does wealth affect consumption? Evidence for Italy,"
Temi di discussione (Economic working papers)
510, Bank of Italy, Economic Research and International Relations Area.
- Paiella, Monica, 2007. "Does wealth affect consumption? Evidence for Italy," Journal of Macroeconomics, Elsevier, vol. 29(1), pages 189-205, March.
- Lise Pichette & Dominique Tremblay, 2003.
"Are Wealth Effects Important for Canada?,"
03-30, Bank of Canada.
- Martha Starr-McCluer, 2002.
"Stock Market Wealth and Consumer Spending,"
Western Economic Association International, vol. 40(1), pages 69-79, January.
- Strøm,Steinar (ed.), 1999. "Econometrics and Economic Theory in the 20th Century," Cambridge Books, Cambridge University Press, number 9780521633659.
- Alexander Ludwig & Torsten SlÃ¸k, 2002. "The Impact of Changes in Stock Prices and House Prices on Consumption in OECD Countries," IMF Working Papers 02/1, International Monetary Fund.
- Nikola Dvornak & Marion Kohler, 2007.
"Housing Wealth, Stock Market Wealth and Consumption: A Panel Analysis for Australia,"
The Economic Record,
The Economic Society of Australia, vol. 83(261), pages 117-130, 06.
- Nikola Dvornak & Marion Kohler, 2003. "Housing Wealth, Stock Market Wealth and Consumption: A Panel Analysis for Australia," RBA Research Discussion Papers rdp2003-07, Reserve Bank of Australia.
- Keith Jefferis & Charles Okeahalam, 2000. "The impact of economic fundamentals on stock markets in southern Africa," Development Southern Africa, Taylor & Francis Journals, vol. 17(1), pages 23-51.
- Peltonen, Tuomas A. & Sousa, Ricardo M. & Vansteenkiste, Isabel, 2009.
"Wealth effects in emerging market economies,"
Working Paper Series
1000, European Central Bank.
- Strøm,Steinar (ed.), 1999. "Econometrics and Economic Theory in the 20th Century," Cambridge Books, Cambridge University Press, number 9780521633239.
- Greenwell Collins Matchaya & Pius Chilonda & Sibusiso Nhelengethwa, 2013. "International Trade and Income in Malawi: A Co-integration and Causality Approach," International Journal of Economic Sciences and Applied Research (IJESAR), Technological Educational Institute (TEI) of Kavala, Greece, vol. 6(2), pages 125-147, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kostas Stergidis).
If references are entirely missing, you can add them using this form.