The second half of the 1990s has seen substantialchanges in the wealth of Americanhouseholds, primarily owing to movements inthe stock market. From mid-1994 to mid-1997, the aggregate value of household sector equityholdings (including those owned by nonprofits, mutualfunds, and pensions and...

Asset market values react to economic news and policychanges, and consumers react to changes in asset marketvalues. The consumption-wealth channel of monetary policyspells out this mechanism: changes in monetary policy affectasset values, which in turn affect consumer spending onnondurable goods...

Many argue that the astonishing growth in Americans' stock portfolios in the 1990s has been a major force behind the growth of consumer spending. This article reviews the relationship between stock market movements and consumption. Using various econometric techniques and specifications, the...