formueeffekt

Formueeffekt, or wealth effect, refers to the change in household consumption and spending that results from a change in perceived or actual wealth. It occurs when asset prices rise or fall—most notably housing and financial assets such as stocks—altering households’ balance sheets without a corresponding change in current disposable income. The effect is a mechanism through which asset markets influence macroeconomic demand.

Mechanisms include a direct wealth channel, where higher wealth boosts confidence and encourages more spending on durable goods and services. A collateral channel can also operate: increased housing wealth improves perceived creditworthiness and loosens borrowing constraints, enabling higher consumption financed by borrowing. Expectations about future income and wealth can amplify the effect, and whether wealth gains are viewed as permanent or transitory affects their impact. The effect tends to be stronger for households with substantial home equity and financial assets.

Empirical evidence shows that the size of the wealth effect varies by country, by the composition of wealth, and by the episode. Housing wealth often exerts a sizable influence on consumption, while the impact of financial wealth depends on stock market participation, risk preferences, and credit access. In recessions or periods of negative asset returns, the wealth effect can amplify declines in consumption and demand.

Policy relevance lies in recognizing asset prices as part of the macroeconomic transmission mechanism. Central banks and governments consider how changes in asset values affect household spending, saving, and debt dynamics, alongside traditional income-based channels.