Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/52482
Authors: 
Caporale, Guglielmo Maria
Sousa, Ricardo M.
Year of Publication: 
2011
Series/Report no.: 
CESifo working paper: Monetary Policy and International Finance 3621
Abstract: 
In this paper we use a representative consumer model to analyse the equilibrium relation between the transitory deviations from the common trend among consumption, aggregate wealth, and labour income, cay, and focus on the implications for both stock returns and housing returns. The evidence based on data for 15 OECD countries shows that when agents expect future stock returns to be higher, they will temporarily allow consumption to rise. Regarding housing returns, if housing assets are seen as complements to stocks, then investors react in the same way, but if they are instead treated as substitutes consumption will be temporarily reduced.
Subjects: 
consumption
wealth
stock returns
housing returns
OECD countries
JEL: 
E21
E44
D12
Document Type: 
Working Paper

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