Multi-Horizon Financial and Housing Wealth Effects across the US States
SUSTAINABILITY, vol.13, no.3, 2021 (SCI-Expanded, SSCI, Scopus)
- Publication Type: Article / Article
- Volume: 13 Issue: 3
- Publication Date: 2021
- Doi Number: 10.3390/su13031341
- Journal Name: SUSTAINABILITY
- Journal Indexes: Science Citation Index Expanded (SCI-EXPANDED), Social Sciences Citation Index (SSCI), Scopus, Aerospace Database, CAB Abstracts, Communication Abstracts, Food Science & Technology Abstracts, Geobase, INSPEC, Metadex, Veterinary Science Database, Directory of Open Access Journals, Civil Engineering Abstracts
- Keywords: consumption, housing wealth effect, financial wealth effect, multi-step causality, STOCK-MARKET WEALTH, LINEAR-DEPENDENCE, REAL-ESTATE, CYCLE, CONSUMPTION, HYPOTHESIS, PRICES, CAUSALITY, FEEDBACK, OUTPUT
- Open Archive Collection: AVESIS Open Access Collection
- TED University Affiliated: No
Abstract
We investigate for the presence of multi-horizon wealth effects across U.S. states over the period of 1975:Q2 to 2012:Q2 by utilizing multi-horizon non-causality testing and multi-horizon causality measurement. At the state/aggregate level, we document that housing wealth has more statistically significant and persistent impact on private consumption than financial wealth. We also find that state-level housing/financial wealth effects are present at long time horizons and exhibit heterogeneity across the U.S. From a policy perspective, we suggest that state-level policies may specifically utilize the housing market to support consumption and growth.