Asking for help (again) for my thesis

["Olivier Giovannoni" <frencholivier@xxxxxxxxxxx>]

Hi everybody

 

I'm currently conducting some research in France about the links between the stock market and the real US economy, that is primarily (un)employment.

I'm currently hesitating between two options (but hardly prefer the first one):

 

1-- More and more there seems to appear the following idea in my head, according to which the rise of the Dow creates a wealth effect and people are tempted to comsume more. Increasing Consumption and Deamnd seems therefore to be the link between the stock and GDP growth, therefore employment growth.

 

2-- But on the other hand, the stock market should *ideally* rise with productivity, I mean LABOR productivity since capital productivity growth is somewhat constant over time and since the labor prod already takes account of its evolution. In this scheme, the stock market should reflect changes in labor productivity, and therefore the Dow and employment should move in opposite directions, which is non-sense according to the facts...

 

And also, what does the recent stock surge mean to you ? Is it just an "animal spirits boom" or a real shift in the way economics are and therefore should be understood ?

 

I'd like to get your point of view on this since I'm neither familiar with the US economy or the financial sector.

Oh, and does anyone know good articles or books on that subject, I mean factual and pragmatic ones (who said keynesians ?) ???

 

Thanks in advance, and thanks to all who replied to the last request (especially you, Paul),

 

Olivier Giovannoni

68 rue de France

06000 Nice, France

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lab: CEMAFI

7av. Robert Schuman

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