英国课程作业范文 [2]
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论文字数:2819论文编号:org201406091458081297语种:英语 English地区:中国价格:免费论文
关键词:英国课程作业英语论文stock returnsCauses of inflationDefinition of inflation
摘要:Competitive companies have to code with more fierce competitions because customers want to find the lowest price from a general higher prices list. My dissertation on the one hand focuses on how general inflation affects on interest rate and then affect on share prices.
the long-term stable relation between stock prices and interest rates. Rahmn and Mutafa (1997) analyzed the cause-and-effect relationship between stock prices and interest rates in many countries; they came out a result that there might be a significant long run co-integration relationship. Neri (2001) believes that the changes on monetary policy were positively related to the fluctuation of stock prices because of liquidity effect. Speaking more specifically, monetary policies affectThe
Assignment is provided by UK Assignment on the ability of money liquidity, as we all know, funds liquidity is a pivotal factor in the stock market. Therefore, he confirmed that monetary policy, such as interest rate changes plays a pivotal role in influencing on stock returns. Bernanke (1992) believe that in various monetary policy tools, interest rates adjustment had the most significantly influence on stock market. Campbell and Kyle (1988) believe that the monetary policy change resulted in interest rate changes, and it affected stock prices running through the expectation of stock dividends and the estimation of discount rate.
6. Previous literature reviews----inflation and stock return
The relationship between inflation and stock return always is a heated and controversial topic in macro
Economics and financial disciplines. Reviewing previous articles in this area, there are three plausible primarily opinions on the relationship between inflation and stock returns: positive correlation, negative correlation and uncorrelated relationship.
Barnes M. and Boyd J.H. and Smith.B.D. (1999) investigated and analyzed several countries data about inflation and stock prices and made a conclusion that under low level inflation or moderate inflation, inflation and nominal equity returns are negatively correlated or even uncorrelated. However, they also agree that inflation and nominal returns have a strongly positive relationship in a high inflation economic circumstance. He thinks that the strengths of inflation determine the relationship between inflation and stock returns. In the next, this
essay will attempt to review others’ opinions on the relationship.
Fisher (1930) posed a hypo
thesis which suggests that stock returns should have a positive relationship with an expectable inflation in an efficient market. In other words, Fisher believes that when the interest rates, discount rates, and inflation rates are expected, a higher inflation can cause a higher stock price. He is one of economists who mainly support the positive relationship. As we all known, inflation can be definite as a process of eroding in the purchasing power of money. Based on Fisher’s hypothesis, a considerable number of scholars think that purchasing shares as a hedging tool that can be used to against inflation, because a higher inflation rate always predict a higher stock return. ‘Broadly selected common stocks are considered to be a good hedge against inflation in the long run’ Cagan (1974) who agrees with the Fisher on the relationship.
Moreover, Boundoukh.J and Richardson.M (1993) tested Fisher’s hypothesis and found that during a long periods the positive relationship between inflation and stock prices is exists.
Furthermore, to examine the relationship, a new approach-------wavelet multiscaling method was invented by Kim. S & In. F (2005) in few years ago. They presented that ‘there is
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