Consumption asymmetry and the stock market: New evidence through a threshold adjustment model

This paper investigates whether stock market wealth affects real consumption asymmetrically through a threshold adjustment model. The empirical findings for the US show that wealth produces an asymmetric effect on real consumption, with negative 'news' affecting consumption less than positive 'news.' Thus, policy makers may want to focus more attention on preventing asset 'bubbles' than on responding to negative asset shocks.

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Year of publication:	2005-03
Authors:	Apergis, Nicholas ; Miller, Stephen M.
Institutions:	Department of Economics, University of Connecticut
Subject:	Consumption \| Stock market \| Wealth effect \| Asymmetry

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Extent:	application/pdf
Series:	Working papers.
Type of publication:	Book / Working Paper
Notes:	The authors express special thanks to Angelos Antzoulatos and Plutarchos Sakellaris for their comments on an earlier draft of this paper and to Giannis Litsios, a charismatic doctorate candidate, for his valuable assistance with the software used in this work. Needless to say, the usual disclaimer applies. The price is Free Number 2005-08 19 pages
Classification:	E21 - Consumption; Saving ; E44 - Financial Markets and the Macroeconomy
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005746061