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Inflation and financial market performance: what have we learned in the last ten years?

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  • John H. Boyd
  • Bruce A. Champ

Abstract

The last decade has witnessed a great deal of theoretical and empirical research on the relationships between inflation, financial market performance, and economic growth. This paper provides a survey of that literature and presents new cross-country empirical results on this topic. We find that inflation is negatively associated with banking industry size, real returns on financial assets, and bank profitability. We also discover a positive relationship between asset return volatility and inflation.

Suggested Citation

  • John H. Boyd & Bruce A. Champ, 2003. "Inflation and financial market performance: what have we learned in the last ten years?," Working Papers (Old Series) 0317, Federal Reserve Bank of Cleveland.
    • Handle: RePEc:fip:fedcwp:0317
    DOI: 10.26509/frbc-wp-200317
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    References listed on IDEAS

    as
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