THE BULL MARKET of the last year has raised the total value of corporate
stock in the United States by nearly a trillion dollars. While many
analysts have tried to explain or interpret the recent movements of the
stock market, there has been less attention to the link between rising
stock prices and real economic activity. How are the gains from an
increase in share prices distributed across households? What fraction of
these gains accrues to a small set of wealthy investors? How do rising
stock prices affect consumer spending?