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The relationship between the real economy and financial sector regarding technological bubbles

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  • Petr Makovský

Abstract

In this article, we presented factors which influence the financial asset´s profitability. First we have introduced the consumption based CAPM model. We have highlighted pros and cons resulting from further empirical research. More we have taken into account the impacts of technological shocks to the new and old economy structure. In the other words impact of technological shocks to the financial asset´s profitability. The time horizon analyzed in the data sample of the Czech Republic is from the 1995 to 2015. Technological progress is deducted on the basis of so called “Sollow” residuals. These are constructed from the real GDP evolution. In the empirical analysis we have presented conclusion about the both Stock exchange profitability dependent on the technological progress and the FOREX asset profitability dependence on the technological progress. A very surprising conclusion is that the technological progress effect to the FOREX asset profitability is immediate, whereas the effect to Stock exchange profitability is in the three years delayed.

Suggested Citation

  • Petr Makovský, 2016. "The relationship between the real economy and financial sector regarding technological bubbles," Ekonomika a Management, Prague University of Economics and Business, vol. 2016(3).
    • Handle: RePEc:prg:jnleam:v:2016:y:2016:i:3:id:276
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    References listed on IDEAS

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    More about this item

    Keywords

    Technologic revolution; C-CAPM; Financial asset´s profitability; Technologická revoluce; C-CAPM; Výnosnost finančních aktiv;
    All these keywords.

    JEL classification:

    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation

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