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英国论文网:British and Dutch GDP:The spread of the cri(29)


has been resilient to the volatility of financial markets in many countries, especially
in Asia. In addition, the housing wealth channel plays an important role in some
emerging market countries that have especially seen rapid build- ups of property
prices, and this channel was ignored in the study.
In addition to private consumption, the wealth effects of stock market valuation
changes are also relevant for a number of other key macroeconomic variables,
notably government revenues and private investment. Investment and share prices
are inherently linked. Since equity prices are forward-looking variables that convey
information about the expected value of firms, they affect investment. Higher stock
market prices also reduce the cost of capital for companies, benefiting their investments.
Results from estimating a simple model for private investment suggest that
a 10% change in stock prices would lead to about 1% change in investment, which
is a substantially stronger effect than on private consumption. This is in line with
the results of Henry (2000), who utilises the same methodology.
What are the possible implications for policy makers? With fluctuations in
stock markets affecting private consumption and investment expenditures and
therefore demand, policy makers need to pay attention to this relationship, especially
in large build-ups of asset price booms and the subsequent bust.
Furthermore, as domestic asset price prices are increasingly influenced by regional
and global factors, there is a possible transmission mechanism of business cycle
movements.
There is no one-size-fits-all approach for dealing with the consumption stock
market wealth effect. The approach should be country-specific and depend on
domestic factors such as the monetary policy framework, financial regulation, the
degree of consumer leverage (especially for retail investors), and the level of stock
market participation in the economy. For instance, a monetary policy stance in an
emerging economy that explicitly targets inflation might find it harder to lean
against asset prices than a central bank that focuses more on the growth of the
economy. The good news is that the consumption stock market wealth effect is
lower in emerging market countries than in advanced economies – but emerging
economies should not ignore its existence.
Note: The views expressed here are those of the author and do not necessarily represent
those of the IMF or IMF policy.
42 The First Global Financial Crisis of the 21st Century Part II
References
Funke, Norbert, 2004, ‘Is there a stock market wealth effect in emerging markets?’
Economics Letters, Vol. 83, No. 3, pp. 417–21.
Henry, Peter Blair, 2000, ‘Do Stock Market Liberalizations Cause Investment
Booms?’ Journal of Financial Economics, Vol. 58, pp. 301–34.


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