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Solving Stock Price-Gross Domestic Product Puzzle: Evidence from Sri Lanka

Author

Listed:
  • Athambawa Jahfer

    (Department of Accountancy and Finance, Faculty of Management and Commerce, South Eastern University of Sri Lanka, Oluvil, Sri Lanka,)

  • Tohru Inoue

    (Graduate School of International Social Sciences, Yokohama National University, 79-4 Tokiwadai, Hodogaya-ku, Yokohama City, Japan)

Abstract

This paper investigates the macroeconomic factors influencing on stock market performances in the long run while solving " Stock price-GDP puzzle" in the Sri Lankan market. The results show that money supply and inflation are positively related with stock market performances and exchange rate, GDP and interest rate are negatively related to the stock market performances.

Suggested Citation

  • Athambawa Jahfer & Tohru Inoue, 2017. "Solving Stock Price-Gross Domestic Product Puzzle: Evidence from Sri Lanka," International Journal of Economics and Financial Issues, Econjournals, vol. 7(5), pages 465-474.
  • Handle: RePEc:eco:journ1:2017-05-55
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    References listed on IDEAS

    as
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    5. Asprem, Mads, 1989. "Stock prices, asset portfolios and macroeconomic variables in ten European countries," Journal of Banking & Finance, Elsevier, vol. 13(4-5), pages 589-612, September.
    6. Engle, Robert F, 1982. "Autoregressive Conditional Heteroscedasticity with Estimates of the Variance of United Kingdom Inflation," Econometrica, Econometric Society, vol. 50(4), pages 987-1007, July.
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    More about this item

    Keywords

    All Share Price Index(ASPI); Market capitalization; Macro Economic factors; Sri Lanka;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G00 - Financial Economics - - General - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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