Download or read book Impact of Monetary Policy on Stock Market Development written by Ebele Nwokoye and published by . This book was released on 2019 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book stock market development and long run growth written by Ross Levine and published by World Bank Publications. This book was released on 1996 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Stock Market Monetary Policy and Economic Development written by and published by . This book was released on 2009 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book 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 published by . This book was released on 1988 with total page 148 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Analytical Study on the Impact of Monetary Policy and Stock Market Volatility in India written by Dr. Puja Dua and published by Book Rivers. This book was released on 2023-01-10 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Impacts of Monetary Policy in the 21st Century written by Ramesh Chandra Das and published by Emerald Group Publishing. This book was released on 2019-09-02 with total page 432 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book The Stock Market Channel of Monetary Policy written by Mr.Ralph Chami and published by International Monetary Fund. This book was released on 1999-02-01 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Asset Price Bubbles written by William Curt Hunter and published by MIT Press. This book was released on 2005 with total page 650 pages. Available in PDF, EPUB and Kindle. Book excerpt: A study of asset price bubbles and the implications for preventing financial instability.
Download or read book Asset Prices and Central Bank Policy written by Stephen Giovanni Cecchetti and published by Centre for Economic Policy Research. This book was released on 2000 with total page 164 pages. Available in PDF, EPUB and Kindle. Book excerpt: Concludes the role of asset prices in monetary policy is one of the most important, and difficult, questions confronting central banks.
Download or read book The Effectiveness of Monetary Policy Transmission Under Capital Inflows written by Ms.Sonali Jain-Chandra and published by International Monetary Fund. This book was released on 2012-11-02 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt: The effectiveness of the monetary policy transmission mechanism in open economies could be impaired if interest rates are driven primarily by global factors, especially during periods of large capital inflows. The main objective of this paper is to assess whether this is true for emerging Asia’s economies. Using a dynamic factor model and a structural vector auto-regression model, we show that long-term interest rates in Asia are indeed predominantly driven by global factors. However, monetary policy transmission mechanism remains effective in the region, as it operates predominantly through short-term interest rates. Nevertheless, the monetary transmission mechanism, though effective, is somewhat weaker in Asia during the periods of surges in capital inflows.
Download or read book Impact of Monetary Policy on Inflation and Stock Returns an Empirical Study written by K. N. Dhakshayini and published by Independent Author. This book was released on 2023-01-15 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book The Federal Reserve System Purposes and Functions written by Board of Governors of the Federal Reserve System and published by . This book was released on 2002 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.
Download or read book Monetary Policy Rules written by John B. Taylor and published by University of Chicago Press. This book was released on 2007-12-01 with total page 460 pages. Available in PDF, EPUB and Kindle. Book excerpt: This timely volume presents the latest thinking on the monetary policy rules and seeks to determine just what types of rules and policy guidelines function best. A unique cooperative research effort that allowed contributors to evaluate different policy rules using their own specific approaches, this collection presents their striking findings on the potential response of interest rates to an array of variables, including alterations in the rates of inflation, unemployment, and exchange. Monetary Policy Rules illustrates that simple policy rules are more robust and more efficient than complex rules with multiple variables. A state-of-the-art appraisal of the fundamental issues facing the Federal Reserve Board and other central banks, Monetary Policy Rules is essential reading for economic analysts and policymakers alike.
Download or read book The Impact of ECB Monetary Policy on Stock and Bond Market Liquidity The Case of Germany written by Terence Kappeln and published by GRIN Verlag. This book was released on 2016-01-18 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Stock Returns and Inflation Redux An Explanation from Monetary Policy in Advanced and Emerging Markets written by Mr. Zhongxia Zhang and published by International Monetary Fund. This book was released on 2021-08-20 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Impact of Monetary Policy on Inflation and Stock Returns an Empirical Study written by Dhakshayini K. N and published by Infotech. This book was released on 2023-02-06 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the last 20 years, liberalization and globalization have changed the Indian economy. Quick, clear changes. Most of our economy was affected, especially the Indian capital market and industry. The financial sector is helped by the Indian capital market. A strong stock market brings in money from both inside and outside the country, which helps the economy grow. Economic growth is affected by fundamental macroeconomic dynamics, the investment climate, the performance of industry sectors, and the global business environment. Investors and policymakers need to understand the macroeconomic factors that affect stock prices and sector indices, which show the growth of different industries.
Download or read book Monetary Policy and the Stock Market in the Euro Area written by Claudio Morana and published by . This book was released on 2013 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper we study the role of the stock market in the transmission mechanism in the euro area and evaluate whether price stability and financial stability are mutually consistent and complementary objectives. Four major conclusions can be drawn from our work. First, stock prices and, more generally, relative asset prices seem to play an important role in the transmission mechanism in the euro area. Second, we do not find any significant, direct impact of stock prices on inflation. These two findings taken together support the view that stock market prices may be important for monetary policy, independently of their direct impact on inflation. Third, permanent productivity shocks are the driving force of the stock market in the long-term and contribute significantly to its cyclical behaviour. Nevertheless, the bulk of cyclical dynamics in the stock market is explained by transitory shocks. Fourth, a monetary policy focused on maintaining price stability in the long-term can contribute also to stock market stability.
