Yesterdays Financial Times (2 September 1998) quotes estimates by US Federal Reserve economists that 3 to 5 per cent of gains in asset prices are spent on consumption, and that given a rise over the last three years of $4,500 bn in houshold wealth this would imply that rising stock prices have boosted consumer spending by up to $225 bn over three years, or just over 1per cent of GDP. Even if the stock market were to decline by a further 30 per cent, it says, this would mean a loss of only 1 per cent of GDP, which would be serious but not catastrophic. Trevor Evans Paul Lincke Ufer 44 10999 Berlin Tel. & fax: +49 30 612 3951 Email: [EMAIL PROTECTED]
