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Effects of Fiscal Policy and Monetary Policy on the Stock Market in Poland

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  • Yu Hsing

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    (Department of Management & Business Administration, College of Business, Southeastern Louisiana University, Hammond, LA 70402, USA)

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    Abstract

    The focus of this paper is to examine potential impacts of fiscal and monetary policies on stock market performance in Poland. Applying the GARCH model and based on a sample during 1999.Q2 to 2012.Q4, this paper finds that Poland’s stock market index is not affected by the ratio of government deficits or debt to GDP and is negatively influenced by the money market rate. The stock index and the ratio of M3 to GDP show a quadratic relationship with a critical value of 46.03%, suggesting that they have a positive relationship if the M3/GDP ratio is less than 46.03% and a negative relationship if the M3/GDP ratio is greater than 46.03%. Furthermore, Poland’s stock index is positively associated with industrial production and stock market performance in Germany and the U.S. and negatively affected by the nominal effective exchange rate and the inflation rate.

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    Bibliographic Info

    Article provided by MDPI, Open Access Journal in its journal Economies.

    Volume (Year): 1 (2013)
    Issue (Month): 3 (October)
    Pages: 19-25

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    Handle: RePEc:gam:jecomi:v:1:y:2013:i:3:p:19-25:d:29437

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    Related research

    Keywords: stock market index; fiscal policy; monetary policy; macroeconomic variables; GARCH;

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