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The impact of changes in asset prices on real economic activity : a cointegration analysis for Germany

This paper reviews theoretical and empirical evidence of asset price movements impact on the real economic activity. A key channel is the wealth effect on consumption. Fluctuations in stock prices and housing prices influence the households wealth and could have important impacts on households consumption. In addition, stock prices may affect corporate sector investments and property prices may affect building activity. Here, the method of cointegration is used to estimate the wealth effect and the investment effect in aggregate time series for Germany after the Reunification in 1990. Moreover, we discuss the role of asset prices in the monetary policy strategy of the ECB.

Identiferoai:union.ndltd.org:Potsdam/oai:kobv.de-opus-ubp:4376
Date January 2010
CreatorsNastansky, Andreas, Strohe, Hans Gerhard
PublisherUniversität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät. Wirtschaftswissenschaften
Source SetsPotsdam University
LanguageEnglish
Detected LanguageEnglish
TypeBook
Formatapplication/pdf
Rightshttp://opus.kobv.de/ubp/doku/urheberrecht.php

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