Now what about the negative wealth effect from the stock market?

The reason for the result is the presence of wealth effects.

Now the question is whether the wealth effect works the same way in reverse.

Stocks can have a major impact on the economy through what is known as the wealth effect.

"A positive wealth effect does lead to stronger economic growth."

The wealth effect, of course, can also move in the opposite direction.

The wealth effect has become integral to the nation's economic strength.

SO why is the wealth effect turning out to be such a poor predictor of human behavior?

The big question mark is the extent to which the so-called wealth effect will come into play.

The stock market wealth effect no longer has its old kick, others argue.

And that wealth effect could cause consumers to cut back on spending far more than they did after their stocks lost value.

A rising stock market will create a wealth effect, another spending stimulus.

"But the wealth effect was put to a very significant test in 1987 and failed miserably."

And it's all being done on the basis of this wealth effect."

But other economic forecasters place less emphasis on the wealth effect.

It all fueled personal income with the wealth effect, which forced interest rates to rise.

The wealth effect is another explanation for how changes in monetary policy and interest rates might affect the economy.

The wealth effect does have an impact on consumption.

Other economists see new ammunition for the argument that there never has been much of a wealth effect.

"The wealth effect has to persist for reasonable periods of time," he said.

Even among those who see the wealth effect as genuine, there is a wide range of opinion over how it affects the economy.

The latter allow to freely scale the wealth effect on the labor supply.

The thing that caused current income to rise for six or seven months has been the wealth effect from equities.

The wealth effect from an increase in the stock market, he estimated, "may be 1 cent" on the dollar.

Thus, wealth effects were controlled for those groups who received mugs and chocolate.