IDEAS home Printed from https://ideas.repec.org/a/fau/fauart/v55y2005i5-6p283-301.html
   My bibliography  Save this article

The Czech Equity Market - Its Effectiveness and Macroeconomic Consequences

Author

Listed:
  • Helena Horská

    () (Raiffeisenbank, Prague)

Abstract

This paper examines features of the Czech stock market’s development from 1997 to 2003 and attempts to unveil the macroeconomic consequences of stock-price development. The analysis of the stock market’s behavior supports a cautionary stance on the hypothesis of the efficient-market theory, even in its weak form. Another finding, as regards the macroeconomic consequences of stock-price development, undermined the assumption of the positive wealth effect of rising stocks. In relation to GDP growth, the prediction power of the stock index proved rather limited. The Czech stock market can also function as an instrument of portfolio diversification, at least in relative terms, since the correlation to the Czech bond market was weak. Contrariwise, the correlation among the Czech, U.S., and European stock markets increased in time, restricting the room for portfolio diversification.

Suggested Citation

  • Helena Horská, 2005. "The Czech Equity Market - Its Effectiveness and Macroeconomic Consequences," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 55(5-6), pages 283-301, May.
  • Handle: RePEc:fau:fauart:v:55:y:2005:i:5-6:p:283-301
    as

    Download full text from publisher

    File URL: http://journal.fsv.cuni.cz/storage/1022_s_283_301.pdf
    Download Restriction: no

    More about this item

    Keywords

    behavioral finance theory; Czech equity market; effective-market theory; European integration; portfolio theory;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fau:fauart:v:55:y:2005:i:5-6:p:283-301. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lenka Herrmannova). General contact details of provider: http://edirc.repec.org/data/icunicz.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.