Document Type


Publication Date


Subject: LCSH

Housing--Prices, Stocks--Prices, Economics--United States

JEL Classification

E20, E32, G00




This paper studies the relationship between housing prices, stock prices, interest rates and aggregate output in the U.S. using monthly data from 1993 to 2014. Evidence from causality tests and a variance decomposition procedure suggest that stock prices have a much larger effect on aggregate output in the U.S. economy than do either housing prices or interest rates. Instead, the wealth effect created by changes in stock prices has a relatively large impact on U.S. aggregate output. Separate estimations and variance decompositions for the sample periods 1993 - 2001, 2002 – 2008 and 2009 – 2014 show that the impact of housing prices relative to stock prices has been waning over time.


This is an Accepted Manuscript of an article published by Taylor & Francis in Applied Economics on August 4, 2017, available online:



Publisher Citation

Upadhyaya, Kamal P., Dharmendra Dhakal, and Franklin G. Mixon Jr. "Housing prices, stock prices and the US economy." Applied Economics (2017): 1-7.

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Economics Commons