Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/337346 
Year of Publication: 
2010
Series/Report no.: 
Statistische Diskussionsbeiträge No. 38
Publisher: 
Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät, Potsdam
Abstract: 
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.
Subjects: 
Stock Prices
Property Prices
Consumption
Investment
Central Banking Policy
JEL: 
E58
E22
E21
C32
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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