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The Relationship between the Stock Market and Consumption


Correspondence: Moawia Alghalith, Department of Economics, The University of the West Indies, St. Augustine, Trinidad. Email:


This paper examines the interaction between consumption and the price/return of stocks. In so doing, we utilise an advanced theoretical and empirical framework. It is worth noting that previous literature used simple linear regressions without a rigorous theoretical basis. Consequently, we present a sophisticated non-linear dynamic model as the theoretical basis of our empirical results.