Impact Of Monetary Policy On Stock Market Development
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Impact Of Monetary Policy On Stock Market Development
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Author : Ebele Nwokoye
language : en
Publisher:
Release Date : 2019
Impact Of Monetary Policy On Stock Market Development written by Ebele Nwokoye and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
The unsustainable and decreasing contribution of the Nigeria stock market to economic growth and development is the rationale for this study. Previous studies were unable to fully address the core developmental problems of the stock market in terms of its contribution to economic growth. These studies focused on how the monetary authorities can stabilize the stock market and reduce its volatility but ignored issues bordering on the contribution of the stock market to economic growth, which of course is the essence of any stock market and as such characterize its development. Consequently, the objective of this study is to investigate the impact of monetary policy on the development of the stock market in Nigeria. The study period covered from 1981 to 2015. Cointegration and vector error correction modelling (VECM) were employed for the analysis. The cointegration test indicates that there exist long run equilibrium relationship among the variables of the model. VECM result indicated that monetary policy, through the growth rate of money supply has impacted positively and significantly on the development of the stock market in Nigeria. Also, findings further indicated that prime lending rate has had a negative impact on the development of the stock market in Nigeria. The study recommended among others, that the Central Bank of Nigeria (CBN) should use its growth rate of money supply to further boost the development of the stock market but must however be mindful of the channeling of the increase in money supply in order to curtail the possible negative impact of inflation.
The Stock Market Monetary Policy And Economic Development
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Author :
language : en
Publisher:
Release Date : 2009
The Stock Market Monetary Policy And Economic Development written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with Economic development categories.
In this paper, we examine the impact of financial market development on capital accumulation and inflation. In particular, we explore this issue in a setting in which banks provide risk pooling services. Furthermore, money overcomes incomplete information to facilitate transactions between individuals. In contrast to previous work, we incorporate a market for equity by allowing individuals to trade capital across generations. Interestingly, we find that the quantitative impact of the stock market may be indeterminate -- the economy may respond with significant gains in capital accumulation or relatively little. Consequently, it is not clear how much financial development will drive down inflation in the long-run. In the case of unique steady-states, expansionary monetary policy causes long-run capital accumulation to fall. However, the response is much stronger in the presence of a stock market. Furthermore, the market for capital may lead to a different qualitative response to monetary policy. That is, financial development may lead to a Tobin effect from inflation. Finally, by studying dynamics, we demonstrate that financial markets and monetary policy can have a significant impact on volatility in the economy. In this manner, there is additional scope for monetary policy to stabilize the economy at higher levels of financial development.
Impact Of The Stock Market Drop And Related Economic Developments On Interest Rates Banking Monetary Policy And Economic Stability
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Author : United States. Congress. House. Committee on Banking, Finance, and Urban Affairs
language : en
Publisher:
Release Date : 1988
Impact Of The Stock Market Drop And Related Economic Developments On Interest Rates Banking Monetary Policy And Economic Stability written by United States. Congress. House. Committee on Banking, Finance, and Urban Affairs and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1988 with Banks and banking categories.
The Stock Market Channel Of Monetary Policy
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Author : Mr.Ralph Chami
language : en
Publisher: International Monetary Fund
Release Date : 1999-02-01
The Stock Market Channel Of Monetary Policy written by Mr.Ralph Chami and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 1999-02-01 with Business & Economics categories.
This paper argues that the stock market is an important channel of monetary policy. Monetary policy affects real economic activity because inflation levies a property tax on stocks in addition to an income tax on dividend payments. Inflation thus taxes stocks more heavily than it does bonds. Households alter their required rate of return as inflation changes, and firms adjust production in order to satisfy their shareholders’ demands. As the stock market channel grows in importance, the appropriate intermediate target for the central bank is the price level, with price stability being the ultimate goal.
Impact Of Monetary Policy On Inflation And Stock Returns An Empirical Study
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Author : K. N. Dhakshayini
language : en
Publisher: Independent Author
Release Date : 2023-01-15
Impact Of Monetary Policy On Inflation And Stock Returns An Empirical Study written by K. N. Dhakshayini and has been published by Independent Author this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-01-15 with Business & Economics categories.
Liberalization and globalization are the twin forces that have transformed the Indian economy in the last two decades. Changes are rapid and visible. They have touched almost all the sectors of our economy, in particular the Indian Capital market and Indian industry. The Indian capital market plays a significant role in the growth of the financial sector. A robust stock market can promote economic growth by bringing in domestic as well as foreign investments. The growth of the economy depends upon multiple elements, such as fundamental macroeconomic factors, investment climate, performance of industry sectors and global business environment. An understanding of the macroeconomic factors that influence the movement of stock prices and the role of sector indices, that represent a variety of industries in economic growth, is essential for investors as well as policy makers.
The Impact Of Ecb Monetary Policy On Stock And Bond Market Liquidity The Case Of Germany
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Author : Terence Kappeln
language : en
Publisher: GRIN Verlag
Release Date : 2016-01-18
The Impact Of Ecb Monetary Policy On Stock And Bond Market Liquidity The Case Of Germany written by Terence Kappeln and has been published by GRIN Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-01-18 with Business & Economics categories.
Bachelor Thesis from the year 2015 in the subject Economics - Finance, grade: 1,0, Vienna University of Economics and Business (Finance and Accounting), language: English, abstract: During the financial crisis and the following Eurozone crisis, liquidity in financial markets basically froze and became a problem for the real economy. Therefore, market liquidity became one of the major concerns of the ECB, which applied non-standard measures, e.g. irregular asset purchasing programmes. This paper sheds light on the impact of monetary policy on liquidity levels of the DAX 30 equity index and German 10-year government bonds. For the following analysis, the monetary policy impacts are estimated using the base money growth rate and EONIA rate, whereas the relative bid-ask spread is employed for measuring liquidity levels. The research method includes literature-based research about common market liquidity theories, a short timeline of important ECB monetary policy decisions, descriptive statistics on liquidity levels and monetary policy variables and a VAR analysis, including variables spreads, returns, volatilities, industrial production and inflation. The results indicate that a decrease (increase) in stock market liquidity or an increase (decrease) in bondmarket volatility lead to a decrease (increase) of EONIA. Furthermore, decreases (increases) in stock return or industrial production result in a decrease (increase) of EONIA. However, base money growth is positively correlated only to changes in bond market volatility. Overall, the results suggest that the monetary policy decisions by the ECB are influenced by changing market conditions without the ability to forecast liquidity levels.
Analytical Study On The Impact Of Monetary Policy And Stock Market Volatility In India
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Author : Dr. Puja Dua
language : en
Publisher: Book Rivers
Release Date : 2023-01-10
Analytical Study On The Impact Of Monetary Policy And Stock Market Volatility In India written by Dr. Puja Dua and has been published by Book Rivers this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-01-10 with Antiques & Collectibles categories.
Stock Market Development And Long Run Growth
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Author : Ross Levine
language : en
Publisher: World Bank Publications
Release Date : 1996
Stock Market Development And Long Run Growth written by Ross Levine and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 1996 with Aumentoa de la produccion categories.
Stock Returns And Inflation Redux An Explanation From Monetary Policy In Advanced And Emerging Markets
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Author : Mr. Zhongxia Zhang
language : en
Publisher: International Monetary Fund
Release Date : 2021-08-20
Stock Returns And Inflation Redux An Explanation From Monetary Policy In Advanced And Emerging Markets written by Mr. Zhongxia Zhang and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-08-20 with Business & Economics categories.
Classical theories of monetary economics predict that real stock returns are negatively correlated with inflation when monetary policy is countercyclical. Previous empirical studies mostly focus on a small group of developed countries or a few countries with hyperinflation. In this paper, I examine the stock return-inflation relation under different monetary policy regimes and conditions using an expanded dataset of 71 economies. Empirical evidence suggests that the stock return-inflation relation is partially driven by monetary policy. If a country’s monetary authority conducts a more countercyclical monetary policy, the stock return-inflation relation becomes more negative. In addition, the results differ by monetary policy framework. In exchange rate anchor countries, stock markets do not respond to monetary policy cyclicality. In inflation targeting countries, stock markets react more strongly to inflation. A key contribution of this paper is to classify inflation targeters by their behaviors, and illustrate that behavior matters in shaping market perceptions: markets react to inflation and monetary policy cyclicality when central banks are able to control inflation within their target bands. In this case markets are sensitive to inflation dynamics when inflation is above the announced target bands. Finally, when monetary policy is constrained by the Zero Lower Bound (ZLB), a structural break is introduced and real stock returns no longer respond to inflation and monetary policy cyclicality.
The Impacts Of Monetary Policy In The 21st Century
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Author : Ramesh Chandra Das
language : en
Publisher: Emerald Group Publishing
Release Date : 2019-09-02
The Impacts Of Monetary Policy In The 21st Century written by Ramesh Chandra Das and has been published by Emerald Group Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-09-02 with Business & Economics categories.
The Impacts of Monetary Policy in the 21st Century illustrates the effect of financial policies upon global economic indicators, with special reference made to issues effecting East Asian nations generally and with a particular focus on Indian economic development since 2000.