Earning More, Spending MoreMuch was made during both the bubble and its bursting of the so-called wealth effect, the alleged propensity of people to spend more when they have more money and to spend less after they get clobbered. One way of tracking this profound insight indirectly is to compare the relative performances of the S&P Retail Index and the broad market as represented by the Wilshire 5000.
|Where's the Wealth Effect? |
Retail outpaces the broad market