Stock Market Volatility and the Business Cycle

In this paper we provide a review of the literature on the link between stock market volatility and aggregate demand. In particular, we focus on the implications of the so-called uncertainty hypothesis according to which it is primarily the uncertainty associated with stock market fluctuations that influences aggregate demand. Empirical studies find that stock market volatility indeed feeds back into the real economy.

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Year of publication:	2010
Authors:	Raunig, Burkhard ; Scharler, Johann
Published in:	Monetary Policy & the Economy. - Oesterreichische Nationalbank. - 2010, 2, p. 54-63
Publisher:	Oesterreichische Nationalbank
Subject:	uncertainty hypothesis \| conditional volatility \| business cycle

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Extent:	application/pdf
Type of publication:	Article
Classification:	E44 - Financial Markets and the Macroeconomy ; E20 - Consumption, Saving, Production, Employment, and Investment. General ; E30 - Prices, Business Fluctuations, and Cycles. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008527033