Stock Market Trading Activity, Human Development, and Well-Being: Short-Run Evidence from Europe and Central Asia

This study examines the short-run association between stock market trading activity and GDP per capita, human development (HDI), and subjective well-being (WHI) in 11 European and Central Asian countries (2012–2021). Fixed- and random-effects estimates reveal significant negative short-run associations of stock trading with GDP per capita and HDI, and none with WHI. Panel Granger tests detect no predictive causality. The negative HDI association is significant only in the emerging-economy subsample, though the advanced–emerging difference is not established, and the associations weaken once year effects absorb common shocks. Findings are consistent with, but do not establish, a “too much finance” interpretation.