Can Money Supply Predict Stock Prices?
A positive causal relation from money supply to stock prices is frequently hypothesized by some financial media and financial analysts. The basis of this assertion is an assumed negative causal relation from money supply to interest rates, and a negative causal relation from interest rates to stock prices. In this paper, we argue against a stable causal relation from money supply to stock prices. An empirical analysis, based on cointegration and Granger Causality tests, supports our argument.
Volume (Year): ()
Issue (Month): ()
|Contact details of provider:|| Web page: http://www.mtsu.edu/~jee|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Douglas K. Pearce & V. Vance Roley, 1984.
"Stock Prices and Economic News,"
NBER Working Papers
1296, National Bureau of Economic Research, Inc.
- Gupta, Manak C., 1974. "Money Supply and Stock Prices: A Probabilistic Approach," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 9(01), pages 57-68, January.
- Kraft, John & Kraft, Arthur, 1977. "Determinants of Common Stock Prices: A Time Series Analysis," Journal of Finance, American Finance Association, vol. 32(2), pages 417-25, May.
- Pesando, James E, 1974. "The Supply of Money and Common Stock Prices: Further Observations on the Econometric Evidence," Journal of Finance, American Finance Association, vol. 29(3), pages 909-21, June.
When requesting a correction, please mention this item's handle: RePEc:mts:jrnlee:200810. 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: (Sally Govan)
If references are entirely missing, you can add them using this form.