Asset prices and the real economy

This paper surveys the literature on the linkages between asset prices and macroeconomic outcomes. It focuses on three major questions. First, what are the basic theoretical linkages between asset prices and macroeconomic outcomes? Second, what is the empirical evidence supporting these linkages? And third, what are the main challenges to the theoretical and empirical findings?

Asset Prices and Macroeconomic Outcomes – A Survey
Authors: Stijn Claessens, M. Ayhan Kose
From: BIS – World Bank

This paper reviews and appraises the body of empirical research on the association between financial markets and economic growth that has accumulated over the past quarter-century. The bulk of the historical evidence suggests that financial development affects economic growth in a positive, monotonic way, yet recent research endeavors have provided useful and important qualifications of this conventional wisdom.

Evidence on finance and economic growth
Authors: Alexander Popov
From: ECB