The Impact of Changes in Stock Prices and House Prices on Consumption in OECD Countries
By Alexander Ludwig, Torsten Sløk. Social Science Research Network, 2002
183 citations recorded by the source corpus.
This paper quantifies the different impact of stock and house prices on consumption using data for 16 OECD countries. The analysis finds that the long-run impact of an increase in stock prices and house prices is in general higher in countries with a market-based financial system. The sensitivity of consumption to changes in stock wealth is about twice as large as the sensitivity to changes in housing wealth. Splitting the sample into the 1980s and 1990s shows that both countries with a market-based financial system and countries with a bank-based financial system moved toward a higher degree of responsiveness of consumption to changes in stock prices and house prices.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/2508babf8ffbe0f5322bc68931b3a0b339bca096
Citations in the corpus
- "Housing and the monetary transmission mechanism," Finance and Economics Discussion Series Working Paper: a speech at the Federal Reserve Bank of Kansas City's Economic Symposium, Jackson Hole, Wyoming, September 1, 2007 (2007, unknown): “Ludwig and Slok (2002) find that effects from housing wealth exceed those from stock market wealth in the sixteen OECD countries they examine and that the difference has been growing.”
- Consumption asymmetry and the stock market: Empirical evidence (2006, unknown): “Porteba and Samwick (1995) propose a leading indicator effect, whereby stock price changes forecast future movements in income.2 Ludwig and Sløk (2002) separate the wealth effect into realized and unrealized components and then offer two additional channels of influence – liquidity-constrained and…”
- The Relationship between Stock Prices, House Prices and Consumption in OECD Countries (2004, unknown): “(19)They are also insensitive when we do not control for the common factor, see Ludwig and Sløk (2002).”