Frans Buelens

Are blue chip stock market indices good proxies for all-shares market indices? The case of the Brussels Stock Exchange 1833-2005

In this article, we calculate a market-weighted return index for the 20 largest stocks listed on the Brussels Stock Exchange over the period 1833–2005, based on a new, unique and high-quality database. We find that this index captures the most important stylised facts of the value-weighted return of all shares listed on the Brussels Stock Exchange in this period. Our results support the empirical practice of concentrating on just the largest stocks. The indices we construct are based on one of the longest Belgian time series available. The indices take into account the exact dividends, the timing of the dividend cash flows and all capital operations. We are therefore able to decompose total returns into capital gain returns and dividend returns, which is not possible with most historical return series. We show that, to construct a credible return index, it is crucial to fully take into account dividends.

Long run stock returns : evidence from Belgium, 1838-2010

We investigate monthly returns of Belgian stocks listed on the Brussels Stock Exchange in the period 1838-2010. Our sample covers all stocks in the market over the entire period. Stock returns strongly depend on dividend income: real capital appreciation tends to be negative. Stocks were less risky in the 19th century than in the 20th century. While the equity premium is overall positive, the reward for equity risk is very volatile over time. Even in the long run equity investors frequently earned a negative return. There are no consistent differences between returns on small stocks and large stocks

The creation of regional blocs in the world economy

International economic relations today show a rather pessimistic picture, with high non-tariff barriers, international trade frictions and a serious crisis in the GATT. The following article analyses present tendencies towards the creation of regional economic blocs and the threats to the world economy which these involve.

Belgian railroad stock returns, 1836-1957

This new time series on price and return indices for the Belgian railroad sector during the 19th century and comparison with the historical risk premium confirms the risk premium to be positive although not that high as was commonly understood.This new time series on price and return indices for the Belgian railroad sector during the 19th century and comparison with the historical risk premium confirms the risk premium to be positive although not that high as was commonly understood.

After the presidential elections: Will the US “open door” trade strategy continue?

During the 1996 US presidential campaign protectionist proposals as well as calls for abandoning all international organizations were formulated, causing alarm in the rest of the world. Does the new US Administrations trade policy concept in fact pose major challenges to the international trade system?