Unexpected Inflation And Stock Returns Revisited
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Unexpected Inflation and Stock Returns Revisited - Evidence from Israel
| Author | : Yakov Amihud |
| Publisher | : |
| Total Pages | : |
| Release | : 2008 |
| Genre | : |
| ISBN | : |
This paper examines the effects of unexpected inflation on stock prices, using Israeli data which provide a direct market-based measure of unexpected inflation: the price reaction of CPI-linked bonds following the CPI announcement. The results show that stock prices have a strong negative relationship with unexpected inflation. The Israeli setting rules out a number of hypotheses advanced in the United States to explain this relationship, such as nominal contracting, inflationary taxation, wealth transfer, and money illusion. This suggests that the negative effect of unexpected inflation is due to its negative association with real activity and its real economic cost.
The Effect of Expected and Unexpected Inflation on the Common Stock Returns of U.S. Financial Institutions
| Author | : Mark Colin Hutchinson |
| Publisher | : |
| Total Pages | : 112 |
| Release | : 2000 |
| Genre | : Financial institutions |
| ISBN | : |
Stock Returns and Inflation
| Author | : Sebastian Schramm |
| Publisher | : |
| Total Pages | : |
| Release | : 2019 |
| Genre | : |
| ISBN | : |
In this thesis, the relationship between stock returns and inflation during the German Hyperinflation is examined. The empirically observable, negative correlation between returns and inflation remains puzzling, as stocks effectively represent real claims. The German hyperinflation provides a suitable setting to test the Fisher Hypothesis, as the monetary phenomenon of extremely high rates of inflation should render other factors possibly interfering and thus distorting the relationship between returns and inflation immaterial. Furthermore, the nominal contracting hypothesis is tested by relating stock returns of firms with different net monetary positions to measures of unexpected inflation. The empirical results showing a statistically significant, positive correlation between both actual and expected inflation and stock returns provide evidence in favour of the Fisher Hypothesis.
Journal of economic theory
| Author | : Universidade da Coruña |
| Publisher | : |
| Total Pages | : |
| Release | : 1998 |
| Genre | : Business & Economics |
| ISBN | : |
The Stock Market Channel of Monetary Policy
| Author | : Mr.Ralph Chami |
| Publisher | : International Monetary Fund |
| Total Pages | : 26 |
| Release | : 1999-02-01 |
| Genre | : Business & Economics |
| ISBN | : 145184395X |
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.
Monetary Policy in Low-Inflation Economies
| Author | : David E. Altig |
| Publisher | : Cambridge University Press |
| Total Pages | : 352 |
| Release | : 2009-07-31 |
| Genre | : Business & Economics |
| ISBN | : 0521848504 |
The essays in this volume investigate the challenges of transitioning to lower levels of inflation and conducting monetary policy in low-inflation economies. The essays make both theoretical and empirical contributions.
Probable Outcomes
| Author | : Ed Easterling |
| Publisher | : |
| Total Pages | : 256 |
| Release | : 2011-01 |
| Genre | : Business & Economics |
| ISBN | : 9781879384828 |
Probable outcomes continues the Crestmont Research tradition of extensive full-color charts and graphs that enable investors and advisors to differentiate between irrational hope and a rational view of the stock market. This book's empowering insights prepare you to take action during the current period of below -average returns. The unique combination of investment science and investment art explores the market from several perspectives and addresses the significant implications for a broad range of investors. Beyond concepts, Ed Easterling delivers a dramatic analysis of the likely course for the stock market over the 2010 decade. Investors and advisors will benefit from this timely outlook and its message of reasonable expectations and value-added investing. This essential resource offers a compelling understanding of the key fundamental principles that drive the stock market. Derived from years of meticulous research, Probably outcomes provides sensible conclusions that will guide your future investment choices and allow you to invest with confidence, whatever your financial strategy."--
