Does Money Supply and Liquidity Affect Share Prices?

2013 ◽  
Author(s):  
Mohamed Ariff ◽  
Tinfah Chung ◽  
Shamsher Mohamad
Keyword(s):  
Money Supply ◽  
Share Prices

scholarly journals The relationship between changes in money supply and changes in share prices: The semi-strong form efficiency of the Johannesburg Stock Exchange revisited

1995 ◽  
Vol 26 (1) ◽  
pp. 19-27 ◽  
Author(s):  
R. D. Glass ◽  
E. V.D.M. Smit
Keyword(s):  
Market Efficiency ◽  
Money Supply ◽  
Stock Exchange ◽  
Efficient Market Hypothesis ◽  
Strong Form ◽  
Share Prices ◽  
Johannesburg Stock Exchange ◽  
Ex Post ◽  
Rigorous Test ◽  
The Relationship

In this article the semi-strong form of share market efficiency over the period 1978 to 1992 is considered, particularly with regard to information about changes in the money supply. To ensure a rigorous test of market efficiency, monetary growth has been decomposed, into anticipated and unanticipated elements. The All Share Index of the Johannesburg Stock Exchange is regressed against the monetary variables. The test results indicate that lagged changes in anticipated monetary growth are significant in explaining changes in share prices, a finding contrary to the efficient market hypothesis. However, the low coefficients of determination indicate that only a small percentage of the variation in share prices is explained by ex post changes in money supply and consequently the potential for a trading rule to earn superior returns to the market is limited.

scholarly journals Money supply, interest rate, liquidity and share prices: A test of their linkage

2012 ◽  
Vol 23 (3) ◽  
pp. 202-220 ◽  
Author(s):  
Mohamed Ariff ◽  
Tin-fah Chung ◽  
Shamsher M.
Keyword(s):  
Interest Rate ◽  
Money Supply ◽  
Share Prices

scholarly journals The effect of monetary and financial variables on share prices of Jordanian commercial banks

2020 ◽  
Vol 15 (3) ◽  
pp. 147-159
Author(s):  
Hel Ajmi Jameel Al-Dhaimesh
Keyword(s):  
Interest Rate ◽  
Money Supply ◽  
Commercial Banks ◽  
Government Expenditures ◽  
Share Prices ◽  
Financial Variables ◽  
Time Deposits ◽  
Domestic Debt ◽  
The Interest Rate ◽  
Positive Effect

This study aims to examine the effect of monetary and financial variables on share prices of Jordanian commercial banks for the period 2001–2018. The monetary variables used in the research include broad money supply, the interest rate on time deposits and inflation, while financial variables include both the deficit of the general budget and government expenditures, and the general government domestic debt. A multiple linear regression equation is designed using E-Views program to test this effect. The study shows that there is a significant positive effect of broad money supply, whereas a negative effect of the general budget deficit and a positive effect of the domestic debt on share prices of commercial banks in Jordan for the specified period. In contrast, there is no effect of both inflation and the interest rate on time deposits and government expenditures on the price of shares of Jordanian commercial banks. The study recommends taking into account the relationship between the variables mentioned in the prices of shares of commercial banks when setting monetary and financial policies by the central bank and the government to determine the extent to which these variables reflect share prices of Jordanian commercial banks. Overall, the regression model reached R2 = 0.63, and this means that 63% of the change in the share prices of Jordanian commercial banks is due to changes in the independent variables included in the model.

Faktor-Faktor Yang Mempengaruhi Nilai Tukar Dollar Amerika Serikat Terhadap Rupiah Tahun 2000–2013

2017 ◽  
Vol 1 (2) ◽  
pp. 177-191
Author(s):  
Rizki Rahma Kusumadewi ◽  
Wahyu Widayat
Keyword(s):  
Time Series ◽  
Exchange Rate ◽  
Money Supply ◽  
Time Series Data ◽  
The United States ◽  
Economic Conditions ◽  
Series Data ◽  
Arch Model ◽  
United States Dollar ◽  
The Exchange Rate

Exchange rate is one tool to measure a country’s economic conditions. The growth of a stable currency value indicates that the country has a relatively good economic conditions or stable. This study has the purpose to analyze the factors that affect the exchange rate of the Indonesian Rupiah against the United States Dollar in the period of 2000-2013. The data used in this study is a secondary data which are time series data, made up of exports, imports, inflation, the BI rate, Gross Domestic Product (GDP), and the money supply (M1) in the quarter base, from first quarter on 2000 to fourth quarter on 2013. Regression model time series data used the ARCH-GARCH with ARCH model selection indicates that the variables that significantly influence the exchange rate are exports, inflation, the central bank rate and the money supply (M1). Whereas import and GDP did not give any influence.

National Currency Appreciation and Growth of the Russian Economy

2004 ◽  
pp. 95-111
Author(s):  
T. Zolotoukhina
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Money Supply ◽  
Capital Flows ◽  
National Currency ◽  
Economic Factors ◽  
Exchange Market ◽  
Russian Economy ◽  
Macroeconomic Indicators

The problem of interaction between Russian currency appreciation and positive dynamics of macroeconomic indicators is studied. Main economic factors of ruble appreciation are analyzed. Consequences of the Russian Central Bank's policy directed to oppose ruble appreciation and problems in financial area due to the increase of money supply through the exchange market are considered. Influence of exchange rate appreciation on economic growth, inflation, export, import, capital flows are discussed. It is concluded that Russian ruble appreciation stimulates an increase in efficiency of the Russian economy.

Investment Processes in the Russian Economy

2004 ◽  
pp. 4-27 ◽  
Author(s):  
V. Lisin
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Money Supply ◽  
Capital Flows ◽  
Economic Factors ◽  
Exchange Market ◽  
Russian Economy ◽  
Macroeconomic Indicators

The problem of interaction between Russian currency appreciation and positive dynamics of macroeconomic indicators is studied. Main economic factors of ruble appreciation are analyzed. Consequences of the Russian Central Bank's policy directed to oppose ruble appreciation and problems in financial area due to the increase of money supply through the exchange market are considered. Influence of exchange rate appreciation on economic growth, inflation, export, import, capital flows are discussed. It is concluded that Russian ruble appreciation stimulates an increase in efficiency of the Russian economy.

The end of Alchemy of Finance and Sovereign Money (on the books by M. King “The end of Alchemy: Money, Banking and the Future of the Global Economy” and by J. Huber “Sovereign Money. Beyond Reserve Banking”)

2017 ◽  
pp. 131-141 ◽  
Author(s):  
V. Yefimov
Keyword(s):  
Economic Policy ◽  
Central Bank ◽  
Institutional Theory ◽  
Money Supply ◽  
Government Spending ◽  
Global Economy ◽  
Private Banks ◽  
Money Creation ◽  
Ministry Of Finance ◽  
Reserve Banking

The review discusses the institutional theory of money considered in the books by King and Huber, and the conclusions that follow from it for economic policy. In accordance with this theory, at present the most of the money supply is created not by the Central Bank but by private banks. When a bank issues a loan, new money is created, and when the loan is repaid this money is destructed. The concept of sovereign money involves the monopoly of money creation of the central bank. In this case the most of newly created money is handed over to the ministry of finance to implement government spending.

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