Cover IMF Working Papers
Buy Book in Print
The Impact of Changes in Stock Prices and House Priceson Consumption in OECD Countries
Author:
Mr. Alexander Ludwig null

Search for other papers by Mr. Alexander Ludwig in
Current site
Google Scholar Close
and
Mr. Torsten M Sloek
Search for other papers by Mr. Torsten M Sloek in
Current site
Google Scholar Close
Series:
IMF Working Papers
Volume/Issue:
Volume 2002: Issue 001
Language:
English
Publication Date:
01 Jan 2002
DOI:
https://doi.org/10.5089/9781451841640.001
ISBN:
9781451841640
ISSN:
1018-5941
Pages:
37
Keywords:
WP; consumption function; house price; stock option; Consumption; wealth effect; panel cointegration; asset prices; coefficient estimate; adjustment coefficient; stock market price; stock market price elasticity; reasonable coefficient estimate; estimation result; price data; price change; robustness of the housing price estimate; run coefficient; stock market wealth; Stock markets; Housing prices; Housing; Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Download PDF (1 MB) Download Epub
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.
  • Collapse
  • Expand
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund