Les effets réels du cours des actions sur la consommation

During the nineties, stock prices increased remarkably. The number of households owning stocks also rose considerably. If stock market wealth has an effect on consumers' decisions, then the rise in equity prices could have contributed to the growth in consumption in recent years. This paper examines the wealth effect resulting from an increase in the value of equity on aggregate consumption. To estimate this relationship, an error correction model has been chosen. Using Canadian data for the sample period first quarter of 1965 to the fourth quarter of 1998, the results show that fluctuations in equity prices have a statistically significant long-run effect on consumption (about 3 per cent of the asset prices change). Short-term variations seem to accelerate the adjustment of household spending to its long-term equilibrium.