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Art and money

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In this paper, the authors investigated the impact of equity markets and top incomes on art prices and found that both same-year and lagged equity market returns have a significant impact on the price level in the art market.
Abstract
This paper investigates the impact of equity markets and top incomes on art prices. Using a long-term art market index that incorporates information on repeated sales since the eighteenth century, we demonstrate that both same-year and lagged equity market returns have a significant impact on the price level in the art market. Over a shorter time frame, we also find empirical evidence that an increase in income inequality may lead to higher prices for art, in line with the results of a numerical simulation analysis. Finally, the results of Johansen cointegration tests strongly suggest the existence of a long-term relation between top incomes and art prices.

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References
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Journal ArticleDOI

The Equity Premium

TL;DR: In this paper, the authors estimate the equity premium using dividend and earnings growth rates to measure the expected rate of capital gain, which is the difference between the expected return on the market portfolio of common stocks and the risk-free interest rate.
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Stock Market Wealth and Consumption

TL;DR: In this paper, the authors explored the link between changes in the aggregate value of corporate stock and changes in consumer spending and found that after a change in stock market values, consumer spending is likely to rise by between one and two cents for each dollar increase in the value of stock.
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The Evolution of Top Incomes: A Historical and International Perspective

TL;DR: In this paper, the authors summarize the main findings and perspectives emerging from a collective research project on the dynamics of income and wealth distribution, and construct a high-quality, long- run, international database on income, wealth concentration, using historical tax statistics.
Posted Content

Asset prices, consumption, and the business cycle

TL;DR: This article reviewed the behavior of financial asset prices in relation to consumption, including stock returns and short-term real interest rates, but bond returns were also considered, and argued that to make sense of asset market behavior one needs a model in which the market price of risk is high, time-varying and correlated with the state of the economy.
Trending Questions (3)
Does art really pay? and what are the source of this?

The paper investigates the impact of equity markets and top incomes on art prices, suggesting that both same-year and lagged equity market returns have a significant impact on art prices. It also finds empirical evidence that an increase in income inequality may lead to higher art prices. However, the paper does not directly address whether art "pays" in terms of financial returns.

Is there money in art?

Yes, there is money in art. The paper investigates the impact of equity markets and top incomes on art prices, suggesting that both equity market returns and income inequality can affect art prices.

How does wealth or income inequality affect art or collectible prices?

The paper finds that an increase in income inequality leads to higher prices for art, suggesting that wealth or income inequality affects art prices.