Time: 10:00 am - 11:30 am, Apr. 1st, 2026
Speaker: Jianhuan Xu (Singapore Management University)
Venue: Zhifuxuan Classroom, Langrun Garden, Peking University
Abstract：
We study when asset-price stabilization generates real economic stimulus. We develop a sufficient-statistics framework showing that the aggregate output response to asset-price shocks depends on three margins: the average marginal propensity to consume (MPC), the covariance between MPCs and asset exposure, and an Engel-type sectoral allocation channel linking marginal expenditure to sectoral multipliers. Using administrative micro data from China that jointly observe consumption and portfolio returns; we identify causal wealth effects through exposure-driven variation in capital gains. The average MPC out of stock wealth is modest and declines with financial wealth. Stock ownership is concentrated among low-MPC households, and marginal spending shifts toward low-multiplier sectors. Together, these forces imply that a one-percent asset-price increase raises aggregate output by 0.85 percent—substantially below standard HANK predictions. The results highlight that the effectiveness of asset-market stabilization depends not only on who receives capital gains but also on how marginal spending reallocates across sectors.
Speaker：
Jianhuan Xu is Associate Professor of Economics at Singapore Management University. His research focuses on macroeconomics, industry dynamics, and development, with publications in journals such as Review of Economics and Statistics, International Economic Review, and Journal of Development Economics.