 Stock Prices, News, and Economic FluctuationsPaul Beaudry and Franck Portier () American Economic Review, 2006, vol. 96, issue 4, 1293-1307 Abstract: We show that the joint behavior of stock prices and TFP favors a view of business cycles driven largely by a shock that does not affect productivity in the short run ? and therefore does not look like a standard technology shock ? but affects productivity with substantial delay ? and therefore does not look like a monetary shock. One structural interpretation for this shock is that it represents news about future technological opportunities which is first captured in stock prices. This shock causes a boom in consumption, investment, and hours worked that precedes productivity growth by a few years, and explains about 50 percent of business cycle fluctuations. (JEL G12, E32, E44) Date: 2006 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:96:y:2006:i:4:p:1293-1307 Ordering information: This journal article can be ordered from Access Statistics for this article American Economic Review is currently edited by Esther Duflo More articles in American Economic Review from American Economic Association Contact information at EDIRC. |
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