When capital markets go up the reported level of happiness goes up as well. In this paper by Murgea and Reisz (July 2012) the authors also argue that the causality goes from capital market to happiness, not the other way around.
The finding is interesting because some argue that cycles result from aggregated psychological factors. From a quick look at the paper I wonder if the authors left out some important variables that might also affect the level of happiness.
The paper includes an interesting happiness ranking by country. The literature review is very informative.
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