Data and Code for "Stock Market Wealth and the Real Economy: A Local Labor Market Approach"
Principal Investigator(s): View help for Principal Investigator(s) Gabriel Chodorow-Reich, Harvard University; Plamen T. Nenov, BI Norwegian Business Schol; Alp Simsek, MIT
Version: View help for Version V1
| Name | File Type | Size | Last Modified |
|---|---|---|---|
| calibration | 01/11/2021 08:09:AM | ||
| empirics | 01/11/2021 08:08:AM | ||
| simulation | 01/11/2021 08:19:AM | ||
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application/pdf | 228.6 KB | 01/11/2021 03:08:AM |
Project Citation:
Chodorow-Reich, Gabriel , Nenov, Plamen T., and Simsek, Alp. Data and Code for “Stock Market Wealth and the Real Economy: A Local Labor Market Approach.” Nashville, TN: American Economic Association [publisher], 2021. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2021-04-09. https://doi.org/10.3886/E123521V1
Project Description
Summary:
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This data archive contains the data and programs necessary to replicate the empirical and numerical analyses in the paper "Stock Market Wealth and the Real Economy: A Local Labor Market Approach."
The paper provides evidence of the stock market wealth effect on consumption by using a local labor market analysis and regional heterogeneity in stock market wealth. An increase in local stock wealth driven by aggregate stock prices increases local employment and payroll in nontradable industries and in total, while having no effect on employment in tradable industries. In a model with consumption wealth effects and geographic heterogeneity, these responses imply a marginal propensity to consume out of a dollar of stock wealth of 3.2 cents per year. We also use the model to quantify the aggregate effects of a stock market wealth shock when monetary policy is passive. A 20% increase in stock valuations, unless countered by monetary policy, increases the aggregate labor bill by at least 1.7% and aggregate hours by at least 0.7% two years after the shock.
Scope of Project
Subject Terms:
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stock prices;
consumption wealth effect;
marginal propensity to consume;
employment;
wages;
regional heterogeneity;
time-varying risk premium;
nominal rigidities;
monetary policy
JEL Classification:
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E21 Macroeconomics: Consumption; Saving; Wealth
E32 Business Fluctuations; Cycles
E44 Financial Markets and the Macroeconomy
E21 Macroeconomics: Consumption; Saving; Wealth
E32 Business Fluctuations; Cycles
E44 Financial Markets and the Macroeconomy
Geographic Coverage:
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US Counties
Time Period(s):
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1990 – 2016
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