New Economy Stock Valuations and Investment in the 1990s

IMF Working Papers, May 1, 2001

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New Economy Stock Valuations and Investment in the 1990s

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Bibliographic details

• Authors: Torsten M Sloek, Hali J Edison
• Published: May 1, 2001
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451850109.001

Paper overview and authors

• Title: New Economy Stock Valuations and Investment in the 1990s
• Authors: Torsten M Sloek, Hali J Edison
• Date: May 1, 2001

Research question and scope

• Investigates whether changes in "new" and "old" economy stock valuations have different impacts on private investment.
• Sample: seven OECD economies.
• Frequency and period: quarterly data over the period 1990-2000.
• Empirical approach: a vector autoregressive model estimated for each individual country.

Key findings

• The impact from changes in valuations of new economy stocks to investment is roughly the same in North America and United Kingdom as in continental Europe.
• The impact from changes in old economy stock valuations on investment is, in general, larger in North America and United Kingdom than in continental Europe.
• In continental Europe the impact on investment from changes in the valuation of new economy stocks is bigger than for old economy stocks.
• For North America and United Kingdom the impact of changes in valuations of new economy and old economy stocks on investment is more similar.

Subject areas and keywords

• Subject: Asset prices, Financial institutions, Financial markets, Market capitalization, National accounts, Prices, Private investment, Stock markets, Stocks
• Keywords: Asset prices, Europe, investment, investment equation, investment literature, Market capitalization, market equity component, new economy, new economy activity, North America, price, price index, Private investment, real investment, short interest, stock, stock markets, Stocks, TMT market, TMT stock market capitalization, TMT stock valuation, United States financial system firm, valuation measure, WP

Source: IMF Working Papers — "New Economy Stock Valuations and Investment in the 1990s" by Torsten M Sloek and Hali J Edison (May 1, 2001).

Content in this bundle

• New Economy Stock Valuations and Investment in the 1990s - WP/01/78
  • New Economy Stock Valuations and Investment in the 1990s - WP/01/78 (Markdown version)
  • New Economy Stock Valuations and Investment in the 1990s - WP/01/78 (PDF)