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Tower Building and Stock Market Returns

Gunter Löffler

University of Ulm - Department of Mathematics and Economics

April 9, 2013

Journal of Financial Research, Forthcoming

Construction starts of skyscrapers predict subsequent US stock returns. The predictive ability exceeds that of alternatives such as the prevailing historical mean, predictions based on dividend ratios and recently suggested combination forecasts. One explanation for these patterns is that tower building is indicative of over-optimism; alternatively, tower building could help to identify periods of low risk aversion. I present indirect evidence that is consistent with both explanations.

Number of Pages in PDF File: 39

Keywords: Predictability, Stock Market, Dividend yield, Skyscrapers

JEL Classification: G12, G14

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Date posted: March 22, 2011 ; Last revised: April 14, 2013

Suggested Citation

Löffler, Gunter, Tower Building and Stock Market Returns (April 9, 2013). Journal of Financial Research, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1787517 or http://dx.doi.org/10.2139/ssrn.1787517

Contact Information

Gunter Löffler (Contact Author)
University of Ulm - Department of Mathematics and Economics ( email )
Ulm, D-89081
+49 731 50 23598 (Phone)
+49 731 50 23950 (Fax)
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