This is why rising share prices encourage consumer spending
County-level data on U.S. stock market holdings suggest that rising share prices induce consumer spending, which raises employment and wages. This is known as the wealth effect.
County-level data on U.S. stock market holdings suggest that rising share prices induce consumer spending, which raises employment and wages. This is known as the wealth effect.
Private firms increase their leverage as they grow, relying particularly on short-term debt, while many public firms deleverage as they expand.