A term that emerged around 2000 to describe the fact that when stock prices rise – households that own stocks feel richer, so they buy more, as well as take out loans to buy homes, cars and other expensive goods; because their highly valued stocks seem to offer banks enough collateral; – companies can more easily borrow or issue new stock, which CETERIS PARIBUS results in a strong surge in demand for capital goods; – foreign investors will turn to this country. However, if the stock market boom comes to an end, these behavioral patterns reverse to a cyclical bear market. – See accelerator, financial, bear market, cyclical, credit channel, credit constraint carousel, luxury consumption, personal credit, value, cyclical, cyclical.
Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent!
University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/