scholarly journals Monetary-Fiscal policies and stock market performance: Evidence from linear ARDL framework

2021 ◽  
Vol 5 (4) ◽  
pp. 69-80
Author(s):  
Aref Emamian ◽  
Nur Syazwani Mazlan
Keyword(s):  
United States ◽  
Stock Market ◽  
Market Performance ◽  
The United States ◽  
Tax Revenue ◽  
Fiscal Policies ◽  
Long Run ◽  
Stock Market Performance ◽  
The Us ◽  
Short Run

Objective – To explore the impacts of monetary and fiscal policies, the appropriateness of both policies and how the stock market is affected by their adoption and implementation in the United States (US). Hence, this study aims to determine the short and long run relationships between monetary and fiscal policies and stock market performance as well as establish potential factors and policies contributing to the highs and lows. Methodology/Technique – We use autoregressive distribution lag (ARDL) developed by Pesaran et al. (2001) to achieve the objective. In this study, annual time series data from the Federal Reserve, World Bank, and International Monetary Fund, from 1986 to 2017 pertaining to the American economy, was used. Findings – The results show that both policies play a significant role in the stock market. We find a significant positive effect of real gross domestic product (RGDP) and the interest rate on the US stock market in the long run and significant negative relationship effect of the consumer price index (CPI) and broad money on the US stock market both in the short run and long run. On the other hand, this study only could support the significant positive impact of tax revenue and significant negative impact of real effective exchange rate on the US stock market in the short run while in the long run are insignificant. Novelty – As the US stock market heavily depends on the Tax Revenue in the short run, any changes in TR can impact on the US stock market considerably. Thus, shareholders can benefit from these results when they look at macroeconomic data in order to enhance their investment strategy. Type of Paper: Empirical. JEL Classification: E52; E62; G18 Keywords: ARDL; Monetary Policy; Fiscal Policy; The Stock Market in The United States. Reference to this paper should be made as follows: Emamian, A; Mazlan, N.S. 2021. Monetary-Fiscal policies and stock market performance: Evidence from linear ARDL framework, Journal of Business and Economics Review, 5(4), 69–80. https://doi.org/10.35609/jber.2021.5.4(7)

The Impact of Monetary and Fiscal Policies on the Stock Market in the United States (U.S); Evidence from Linear ARDL Framework

2020 ◽  
Vol 11 (1) ◽  
pp. 132-132
Author(s):  
Aref Emamian
Keyword(s):  
United States ◽  
Stock Market ◽  
The United States ◽  
Real Effective Exchange Rate ◽  
Annual Data ◽  
Fiscal Policies ◽  
Long Run ◽  
The Us ◽  
Short Run ◽  
The Impact

This study examines the impact of monetary and fiscal policies on the stock market in the United States (US), were used. By employing the method of Autoregressive Distributed Lags (ARDL) developed by Pesaran et al. (2001). Annual data from the Federal Reserve, World Bank, and International Monetary Fund, from 1986 to 2017 pertaining to the American economy, the results show that both policies play a significant role in the stock market. We find a significant positive effect of real Gross Domestic Product and the interest rate on the US stock market in the long run and significant negative relationship effect of Consumer Price Index (CPI) and broad money on the US stock market both in the short run and long run. On the other hand, this study only could support the significant positive impact of tax revenue and significant negative impact of real effective exchange rate on the US stock market in the short run while in the long run are insignificant. Keywords: ARDL, monetary policy, fiscal policy, stock market, United States

scholarly journals Does Monetary Policy and Foreign Direct Investment Have an Influence on the Performance of Stock Market: Further Empirical Evidence from Ghana

2020 ◽  
Vol 2 (2) ◽  
pp. 161-176
Author(s):  
Opoku Adabor ◽  
Emmanuel Buabeng
Keyword(s):  
Monetary Policy ◽  
Foreign Direct Investment ◽  
Stock Market ◽  
Direct Investment ◽  
Market Performance ◽  
Empirical Literature ◽  
Long Run ◽  
Stock Market Performance ◽  
Short Run ◽  
Positive Effect

Monetary policy, foreign direct investment, and the stock market continue to dominate in discussions in developing countries. However, the linkage between the three variables in empirical literature remains unclear. This study aims to test two separate hypotheses: Firstly, the study examines the effects of monetary policy on stock market performance in Ghana. Secondly, the study also empirically investigates the effect of foreign direct investment on stock market performance in Ghana. Autoregressive Distributed Lag (ARDL) model was employed as an estimation strategy to examine the short and long-run effects using annual time series data from 1990 to 2019. The study revealed that monetary policy rate and money supply exerts a statistically significant negative and a positive effect on stock market performance in both the long and short-run in Ghana, respectively. It was also found that foreign direct investment has significant and a positive effect on stock market performance in Ghana in both the long and short run. Total capital stock and volume traded were also found to exert significant positive and negative impacts on stock market performance both in the short and long run respectively. Based on our findings, we recommend that expansionary monetary policy will be a better option to be carried out to improve the stock market performance in Ghana. Furthermore, government and private partnership may ensure the effective management of the macroeconomic variables to attract foreign direct investment into Ghana to boost stock market performance.

Stock Market Responses to Monetary and Fiscal Policies

2022 ◽  
pp. 266-282
Author(s):  
Elif Erer ◽  
Deniz Erer
Keyword(s):  
Stock Market ◽  
Fiscal Policies ◽  
Market Returns ◽  
Monetary Policies ◽  
Stock Market Returns ◽  
Long Run ◽  
Stock Market Performance ◽  
Short Run ◽  
Effect Hypothesis ◽  
Positive Effect

This study analyzes the short-run and long-run effects of interaction between fiscal and monetary policies on stock market performance in four emerging Asian economies, which are China, India, Indonesia, and Malaysia, by using ARDL model. The study covers the period of 2003:Q1-2020:Q1. The findings from this study show monetary and fiscal policies play an important role in determining stock market returns. Also, the results theoretically support Richardian neutrality hypothesis for China and Indonesia, Keynesian positive effect hypothesis for India, and classical crowding out effect hypothesis for Malaysia, and interest channel of monetary transmission mechanism only for China.

The United State and East Asia: A New Paradigm?

1994 ◽  
Vol 9 (0) ◽  
pp. 21-41
Author(s):  
Kyongsoo Lho
Keyword(s):  
United States ◽  
East Asia ◽  
The United States ◽  
New Paradigm ◽  
Economic Relations ◽  
Long Run ◽  
The Us ◽  
Short Run ◽  
The Cold War ◽  
First Time

The end of the Cold War has precipitated a major rethinking of the United States' international commitments in both the scholarly and policymaking communities. For the first time in nearly half a century, the United States is fundamentally reconsidering both its military and economic relations with the outside world. However, the debate over how to restructure US foreign policy has generally focused on Europe. When analysts have referred to Asia, the emphasis has generally been on economic problems in the region. Similarly, the thrust of these works has tended to remain short-term, looking at the immediate future. This paper challenges these viewpoints. It argues that East Asia is as important as Europe to the United States, for security as well as economic reasons. The paper looks at the long-run as well as short-run trends in East Asia, and argues that the issues the US will face in the future will not arise solely from its traditional adversaries-a major problem will be managing conflicts within alliances.

scholarly journals The Effect of Money Supply, Exchange Rate, and Interest Spread toward the Performance of Stock Market in Malaysia

2019 ◽  
Vol 6 (2) ◽  
pp. 142
Author(s):  
Yeoh Kai Qing ◽  
Suhal Kusairi
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Money Supply ◽  
Market Performance ◽  
Real Effective Exchange Rate ◽  
Long Run ◽  
Stock Market Performance ◽  
Effective Exchange ◽  
Short Run ◽  
Effective Exchange Rate

The stock market has become a significant role in the economy and has attracted investor's attention, as it is to generate funds and make an investment decision for companies and investors as well. Therefore, the objective of this study is to study the effect of the money supply, exchange rate, interest spread and stock market in the short and long run and volatility issue. The study employed monthly data, from January 1997 to August 2018. Method analysis is the Autoregressive distributed lag (ARDL) and GARCH model. The findings stated that the money supply, real effective exchange rate, interest spread, had a long-run effect on the performance of the stock market. Money supply and the real effective exchange rate had a positive effect on the stock market performance in the short run. Conversely, the interest spread showed a negative influent on the stock market performance in the short run. The volatility indicated a high persistence between the money supply, real effective exchange rate, interest spread and stock market (KLCI). The implication of the study is the investors or policymakers should take account the changes of interest rate and exchange rate before making stock investment or policy to stabilize the stock market performance.Keywords: Performance, Money Supply, Real Effective Exchange Rate (REER), Interest Spread

scholarly journals The Effects of Passenger Risk Perception During the COVID-19 Pandemic on Airline Industry: Evidence From the United States Stock Market

2022 ◽  
Vol 12 ◽  
Author(s):  
Zhou Lu ◽  
Linchuang Zhu ◽  
Zhenhui Li ◽  
Xueping Liang ◽  
Yuan Zhang
Keyword(s):  
United States ◽  
Structural Change ◽  
Risk Perception ◽  
Stock Market ◽  
Airline Industry ◽  
Market Performance ◽  
The United States ◽  
Stock Market Performance ◽  
Significant Difference ◽  
The Impact

The COVID-19 pandemic has caused a dramatic reshaping of passenger risk perception for airline industry. The sharp increase in risk aversion by air passenger has caused a disastrous impact on the tourism service industry, particularly airline industry. Although the existing literature has provided a lot of studies on the impact of the pandemic on travel industry, there are very few studies discussing the impact of change in passenger risk perception on the stock market performance of airline industry. This study considers two types of airline companies, full-service and low-cost. In order to overcome the traditional problem of the Chow test, Quandt–Andrews test is used to identify structural change points during the pandemic in the stock prices of United States airline companies. The result shows that an industry-wide structural change in the stock market performance indeed is found to take place during the pandemic for United States airline companies. Meanwhile, no significant difference is found in the structural change date between the two types of airline companies. The selected airline companies are found to be clustered toward the end of 2020 (November and December) in their structural change dates. Although the strike of the COVID-19 pandemic on airline industry has proven to be widespread and profound, our investigation implies that air passengers have gradually adapted to the new normal of travel activities at some level and partly rebuild their sense of safety under the strict epidemic-control measures.

Sign in / Sign up

Export Citation Format

Share Document