Finance and Economics Discussion Series - Consumer Sentiment and the Stock Market (Paperback)

This paper examines the relationship between movements in consumer sentiment and stock prices. At the aggregate level, the two share a strong contemporaneous relationship: an increase in equity values boosts sentiment. However, I examined the nature of the relationship between the two. Does an increase in stock prices raise aggregate sentiment because people are wealthier or because they use movements in stock prices as an indicator of future economic activity and potential labor income growth? Using individual observations from the Michigan survey I found results more consistent with the view that people use movements in equity prices as a leading indicator. Although the findings do not rule out a traditional wealth effect, they do raise some questions about the causal role of wealth in aggregate spending.

General

Imprint:	Bibliogov
Country of origin:	United States
Release date:	February 2013
First published:	February 2013
Authors:	Mary Ward Otto
Dimensions:	246 x 189 x 1mm (L x W x T)
Format:	Paperback - Trade
Pages:	24
ISBN-13:	978-1-288-71782-8
Categories:	Books > Social sciences > Politics & government > General
LSN:	1-288-71782-2
Barcode:	9781288717828

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