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Corresponding Author:
Per-Ola Maneschiöld, Karlstad Business School, Department of Business Administration, Karlstad University, Karlstad, Sweden

Stock Market Wealth and Consumption in Argentina, Brazil and Mexico

October 12, 2026
JEL classification: C22; E21
Keywords: Consumption; Cointegration; Causality; Wealth

Abstract

The link between stock market return and consumption growth is analysed for Argentina, Brazil and Mexico. The Johansen cointegration procedure reveals cointegration for each country. Causality running from stock returns to consumption growth is found in Argentina, Brazil and Mexico implying that wealth effects are important explaining consumption. Evidence of a reverse causation is found in each country implying that stock performance is linked to macroeconomic fluctuations represented by consumption. The two-way causation in Argentina, Brazil and Mexico implies that the wealth effect of the stock market on the real economy can be overestimated.


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