Output, Consumption and the Stock Market: Implications for European Convergence

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Abstract

This paper investigates the nature of the relationship between output and stock prices, and consumption and stock prices, with respect to the different financial structures that exist primarily in the European Union (EU). Evidence is found of a long-run relationship for both relationships, with the exception of Germany and to an extent France, which is argued is due to their bank dominated financial systems. Kalman Filter estimates reveal that both relationships have increased in strength, although little evidence is found of any convergence in the strength of the relationship across the EU.
Original languageEnglish
Pages (from-to)317--323
Number of pages7
JournalApplied Economics
Volume34
Publication statusPublished - Feb 2002

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Stock market
Stock prices
European Union
Kalman filter
France
Germany
Financial system
Financial structure
Long-run relationship

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Output, Consumption and the Stock Market: Implications for European Convergence. / Morley, B.

In: Applied Economics, Vol. 34, 02.2002, p. 317--323.

Research output: Contribution to journalArticle

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