 Housing and Stock Market Nexus in the USFeng-Li Lin, Mei-Chih Wang and Hsien-Hung Kung European Research Studies Journal, 2020, vol. XXIII, issue 3, 114-130 Abstract: Purpose: The research aims to study the causality between the US stock and housing markets in the period from 1890 to 2014. Design/Methodology/Approach: The Granger-Causality bootstrap rolling-window test is used for studying the causality between the stock as well as real estate markets in the US. Findings: The results provide robust evidence that the causality running from the housing in the stock markets has positive effects between 1918 and 1922, 1926 and 1931, 1953 and 1955 but negative effects between 1932 and 1934 and from 1971 to 1972, displaying the occurrence of a credit-price effect. In contrast, the S&P 500 stomped the housing market between 1965 and 1970, when the wealth effect dominated in the US economy. Specifically, when the negative causality of both markets happens, investors gain by allocating housing and stocks assets as various portfolios. Practical Implications: This finding specifies that housing markets may be employed to predict stock markets and vice versa in the US. Studying both markets’ causality offers policymakers and practitioners more situation on where the market may be going and how it works over time. Originality/Value: Original research. Keywords: Stock Market; housing market; bootstrap; Granger causality; rolling-window test. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ers:journl:v:xxiii:y:2020:i:3:p:114-130 Access Statistics for this article More articles in European Research Studies Journal from European Research Studies Journal |
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