You are here

Economists are calm, even if equities are not

There are reasons why equity volatility may be ignored in the real world, but economists cannot entirely ignore the moves in financial markets.

Home ownership is a critical part of wealth in many countries. The increase in house prices in the US and the stability of property prices in top-tier Chinese cities more than offset the movement in equity prices for most of the economy.

THE start of 2016 has been a turbulent time in the world's equity markets. The world's economies have been far less volatile. Once again, economics and markets seem to be moving in different directions. This divergence may well continue.

The relationship between equities and economies is