Stock Market Wealth and Consumer Spending

摘要

This paper investigates the effects of stock market wealth on consumer spending.211u001eTraditional macroeconometric models estimate that a dollar's increase in stock 211u001emarket wealth boosts consumer spending by 3-7 cents per year. With the 211u001esubstantial 1990s rise in stock prices, the nature and magnitude of this 'wealth 211u001eeffect' have been much debated. After describing the issues and reviewing 211u001eprevious research, I present new evidence from the SRC Survey of Consumers. The 211u001esurvey results are broadly consistent with lifecycle saving and a modest wealth 211u001eeffect: Most stockholders reported no appreciable effect of stock prices on their 211u001esaving or spending, but many mentioned 'retirement saving' in explaining their 211u001ebehavior.