The impact from changes in stock market valuations on investment: new economy versus old economy
This paper investigates whether there is a different impact from changes in 'new' and 'old' economy stock valuations on private investment for seven OECD economies. A vector autoregressive model is estimated for each individual country, using quarterly data over the period 1990-2000. It is found that the impact from changes in valuations of new economy stocks to investment is roughly the same in North America and in the United Kingdom as in continental Europe. By contrast, the impact from changes in old economy stock valuations on investment is, in general, larger in North America and in the United Kingdom than in continental Europe. Finally, the results suggest that in continental Europe the impact on investment from changes in the valuation of new economy stocks is bigger than for old economy stocks, whereas for North America and the United Kingdom, the impact is more similar.
Volume (Year): 35 (2003)
Issue (Month): 9 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAEC20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAEC20|
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.:
- Bernanke, Ben & Gertler, Mark & Gilchrist, Simon, 1996.
"The Financial Accelerator and the Flight to Quality,"
The Review of Economics and Statistics,
MIT Press, vol. 78(1), pages 1-15, February.
- Simon Gilchrist & Ben S. Bernanke & Mark Gertler, 1994. "The financial accelerator and the flight to quality," Finance and Economics Discussion Series 94-18, Board of Governors of the Federal Reserve System (U.S.).
- Bernanke, Ben & Gertler, Mark & Gilchrist, Simon, 1994. "The Financial Accelerator and the Flight to Quality," Working Papers 94-24, C.V. Starr Center for Applied Economics, New York University.
- Ben Bernanke & Mark Gertler & Simon Gilchrist, 1994. "The Financial Accelerator and the Flight to Quality," NBER Working Papers 4789, National Bureau of Economic Research, Inc.
- Alexander Ludwig & Torsten M Sloek, 2002. "The Impact of Changes in Stock Prices and House Priceson Consumption in OECD Countries," IMF Working Papers 02/1, International Monetary Fund.
- Barro, Robert J, 1990. "The Stock Market and Investment," Review of Financial Studies, Society for Financial Studies, vol. 3(1), pages 115-131.
- Robert J. Barro, 1989. "The Stock Market and Investment," NBER Working Papers 2925, National Bureau of Economic Research, Inc.
- Shiller, Robert J, 1981. "Do Stock Prices Move Too Much to be Justified by Subsequent Changes in Dividends?," American Economic Review, American Economic Association, vol. 71(3), pages 421-436, June.
- Robert J. Shiller, 1980. "Do Stock Prices Move Too Much to be Justified by Subsequent Changes in Dividends?," NBER Working Papers 0456, National Bureau of Economic Research, Inc.
- Galeotti, Marzio & Schiantarelli, Fabio, 1994. "Stock Market Volatility and Investment: Do Only Fundamentals Matter?," Economica, London School of Economics and Political Science, vol. 61(242), pages 147-165, May.
- Galeotti, Marzio & Schiantarelli, Fabio, 1990. "Stock Market Volatility And Investment: Do Only Fundamental Matter?," Working Papers 90-15, C.V. Starr Center for Applied Economics, New York University.
- Hayashi, Fumio, 1982. "Tobin's Marginal q and Average q: A Neoclassical Interpretation," Econometrica, Econometric Society, vol. 50(1), pages 213-224, January.
- Fumio Hayashi, 1981. "Tobin's Marginal q and Average a : A Neoclassical Interpretation," Discussion Papers 457, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Singh, Ajit & Singh, Alaka & Wiesse, Bruce, 2000. "Information technology, venture capital and the stock market," MPRA Paper 53718, University Library of Munich, Germany.
- Singh, Ajit & Singh, Alaka & Wiess, Bruce, 2000. "Information Technology, Venture Capital and the Stock Market," Accounting and Finance Discussion Papers 00-af47, Faculty of Economics, University of Cambridge.
- Torsten M Sloek & Hali J Edison, 2001. "Wealth Effects and the New Economy," IMF Working Papers 01/77, International Monetary Fund.
- Zuliu Hu, 1995. "Stock Market Volatility and Corporate Investment," IMF Working Papers 95/102, International Monetary Fund.
- Poterba, James M. & Summers, Lawrence H., 1988. "Mean reversion in stock prices : Evidence and Implications," Journal of Financial Economics, Elsevier, vol. 22(1), pages 27-59, October.
- James M. Poterba & Lawrence H. Summers, 1987. "Mean Reversion in Stock Prices: Evidence and Implications," NBER Working Papers 2343, National Bureau of Economic Research, Inc.