Stock market and macroeconomic variables in india

Stock markets, growth, and tax policy. The nature of the causal relationship between stock market and macroeconomic aggregates in India: The Hodrick-Prescott HP Filter is one of the most popularly used univariate statistical filter to estimate the output gap.

Yet forecasting still serves the useful purpose of giving us, within broad limits, a sense of where the economy may be headed, allowing consumers, producers and government macroeconomic policy planners to plan ahead with some level of rational certainty.

Journal of Economics and Behavioral Studies, Vol. For example, if the economy is producing less than potential output, government spending can be used to employ idle resources and boost output. Full employment unemployment is said to be voluntary because economists believe that at full employment, all it will take to fine jobs is a change in attitude on the part of the unemployed.

Demand-pull inflation occurs whenever there is a sudden and significant jump in consumer demand which stays way ahead of supply.


There are numerous ways this type of demographic shift can affect the real estate market, but for an investor, some key questions to ask might be: Government spending does not have to make up for the entire output gap.

Fluctuations in the economy GDP over time are referred to as business cycles. The total output of the economy is measured GDP per person.

Foreign capital inflows, economic growth and stock market capitalization in Asian countries: Macroeconomic factors do influence aggregate stock returns. Review of Financial Studies, Vol.

4 Key Factors That Drive the Real Estate Market

Journal of Business Studies QuarterlyVol. The 12 Presidents of the Federal Reserve District Banks is collectively responsible for establishing and recommending to the Fed the discount rate.

The Case of Lahore Stock Exchange. International evidence on stock market and aggregate economic activity. Trends and random walks in macroeconomic time series. Money or the cost of borrowing it is an important macroeconomic tool for stabilizing the economy.

The Journal of Financial Research,18 2: Causal relation among stock returns and macroeconomic variables in a small, open economy. Quarterly review 19, no. The relationship between economic factors and equity markets in Central Europe.

The RBI staff, therefore, undertakes an assessment of the output gap using alternative estimation approaches, supplemented by information from various surveys and other macroeconomic variables, to draw more robust inferences on the stage of the business cycle.

Modeling exchange rate dynamics in India using stock market indices and macroeconomic variables

The housing market serves as another vital economic indicator. During this phase, the inflation-neutral output gap also remained negative and tended to close, but at a slower pace than the FNOG.

Journal of Finance, Vol. While consumer confidence is forward looking, retail sales indicators reveal historic shopping patterns.

List some of the most important macroeconomic factors affecting businesses today?

Bureau of Labor Statistics releases its monthly unemployment report and nonfarm payroll. Evidence from Developing Economy. Journal of Financial Economics, Vol.

This they do by maintaining a fraction of their total deposits or liabilities as reserves with the Federal Reserve District Banks.

For more insight, read Understanding the Consumer Confidence Index. For a number of theoretic and historical reasons, both classical as well as neoclassical economists had prior to the Great Depression, believed business cycles would be weak and insignificant for the overall production.

The purpose of this paper is to analyze the relationship of economic and financial variables with behavior of stock returns.

The study is based on ten industrial sectors of Karachi Stock Exchange (KSE). It employs low frequency monthly data on stock market returns, GDP, industrial.

Macroeconomics encompasses a variety of concepts and variables, but there are three central topics for macroeconomic research. Macroeconomic theories usually relate the phenomena of output, unemployment, and inflation.

Purpose of the study: The present study investigates the influence of selected macroeconomic variables in terms of international crude oil price, exchange rates, domestic gold price, real interest rates and wholesale price index on stock market indices (sensex and nifty) of India.

eight macroeconomic variables - Interest Rate, Inflation, Exchange Rate, Index of Industrial Production, Money Supply, Gold Price, Silver Price and Oil Price, and two widely used composite indices of the stock market of India - Sensex and S&P CNX Nifty.

Money supply and Inflation have a positive relationship among themselves. This paper is intended to study the impact of various macroeconomic variables on Indian stock market.

Macroeconomic variables and stock market: US review

Based on the Arbitrage Pricing Theory (APT) propounded by Ross in and various other studies, a number of macroeconomic variables including, inflation, industrial production, exchange rate. The effect of selected macroeconomic variables shocks on the stock market of India would be survived if sensex and nifty are significantly associated with the selected .

Stock market and macroeconomic variables in india
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