The impact of stock market on United States economic growth

Stock market changes may significantly affect consumer and corporate confidence, investment choices, and economic development. The stock market is a key sign of the health of the economy as a whole. But in other hand, the impact of the stock market on the US economy carries a systemic risk. Due to the financial markets' interdependence, a substantial shock to the stock market can easily spread to other sectors of the economy, causing a more severe slump. This study analyzed the connection among stock market growth and US economic growth. Used time series data between 1975-2019, Cointegration tests, bound Autoregressive distribution lag (ARDL), and a causality test is using to validate the analysis. The outcome of the cointegration test demonstrates that the explained and explanatory variables have a long run association. Moreover, we perform the bound ARDL test to determine whether the connection is short or long. The outcome demonstrates that the association amongst the variables is long. Additionally, when the long-term connection was used, the consequences designated a negative and significant association among marketplace capitalization and US economic growth. However, there is no immediate correlation among market capitalization. The Causality Test reveals a one-way connection among market capitalization and US economic growth.