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The Stock Market and Consumer Confidence: European Evidence
W. Jos Jansen,Niek Nahuis +1 more
TLDR
In this paper, the authors studied the relationship between stock market developments and consumer confidence in eleven European countries over the years 1986-2001 and found that stock returns and changes in sentiment are positively correlated for nine countries, with Germany as the main exception.Abstract:Â
This paper studies the (short-run) relationship between stock market developments and consumer confidence in eleven European countries over the years 1986-2001. We find that stock returns and changes in sentiment are positively correlated for nine countries, with Germany as the main exception. Moreover, stock returns generally Granger-cause consumer confidence at very short horizons (two weeks to one month), but not vice versa. The stock market-confidence relationship is driven by expectations about economy-wide conditions rather than personal finances. This suggests that the confidence channel is not part of the conventional wealth effect, but a separate transmission channel.read more
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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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Investor sentiment and stock returns: Some international evidence
TL;DR: The authors examined consumer confidence as a proxy for individual investor sentiment and found that when sentiment is high, future stock returns tend to be lower and vice versa, and employed a cross-sectional perspective and provided evidence that the impact of sentiment on stock returns is higher for countries which have less market integrity and which are culturally more prone to herd-like behavior and overreaction.
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Social Mood and Financial Economics
TL;DR: In this paper, the authors proposed that the general level of optimism/pessimism in society is reflected by the emotions of financial decision-makers and that the stock market itself is a direct measure or gauge of social mood.
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Consumer Sentiment and Economic Activity: A Cross Country Comparison
TL;DR: In this paper, the authors assess the validity of the consumer confidence indices in anticipating the evolution of economic activity by considering a fairly high number of countries across the world (i.e. France, Germany, Italy, UK, USA, Japan, Canada and Australia) over a period of about thirty years, from the beginning of the seventies till the end of 2002 (quarterly data).
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Stock Market Volatility and the Business Cycle
Burkhard Raunig,Johann Scharler +1 more
TL;DR: In this paper, the authors provide a review of the literature on the link between stock market volatility and aggregate demand, focusing on the implications of the so-called uncertainty hypothesis according to which it is primarily the uncertainty associated with stock market fluctuations that influences aggregate demand.
References
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The Financial Accelerator in a Quantitative Business Cycle Framework
TL;DR: This article developed a dynamic general equilibrium model that is intended to help clarify the role of credit market frictions in business fluctuations, from both a qualitative and a quantitative standpoint, and the model is a synthesis of the leading approaches in the literature.
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Forecasting Output and Inflation: The Role of Asset Prices
TL;DR: The authors examined the predictive performance of asset prices for inflation and real output growth in seven OECD countries for a span of up to 41 years (1959 1999) and concluded that good forecasting performance by an indicator in one period seems to be unrelated to whether it is a useful predictor in a later period.
Journal ArticleDOI
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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Does Consumer Sentiment Forecast Household Spending? If So, Why?
TL;DR: Carroll et al. as mentioned in this paper found that lagged values of the ICS, taken on their own, explain about 14 percent of the variation in the growth of total real personal consumption expenditures over the post-1954 period.
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The Great Crash and the Onset of the Great Depression
TL;DR: In this article, the authors argue that the collapse of stock prices in October 1929 generated temporary uncertainty about future income which caused consumers to forego purchases of durable and semidurable goods in late 1929 and much of 1930.