Empirical estimates of an error-correction model, nested in a partial adjustment framework, show that the euro had a temporary impact, via mergers and acquisitions activity, on corporate bond issuance in the euro area. In addition, a permanent effect is found for corporate bonds issued by...

This article estimates equity wealth effects on euro area consumption, splitting equity returns into fundamental- and bubble-related components. The equity wealth effect is fundamental-driven, particularly strong since 1994, and operates comparatively quickly during negative bubble returns.

Regression results show that the external financing costs, the financing gap and profit expectations significantly matter for US and euro area aggregate (nonconstruction) investment. This finding supports the view that external and internal financing constraints hamper investment also at the...

In-sample and out-of-sample evidence for major countries shows that stock price determinants (earnings, risk-free interest rate and equity risk premium) accurately predict real Gross Domestic Product beyond 1 year compared to the stock price index, dividend yield, price/earnings ratio and the...