Inflation, monetary policy and stock market conditions
By: Michael D. Bordo, Michael J. Dueker, David C. Wheelock.
Contributors: Dueker, Michael.; Wheelock, David C.; National Bureau of Economic Research.
Series: NBER working paper series -- working paper 14019; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 14019.
Publisher: National Bureau of Economic Research
Published: 2008
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "This paper examines the association between inflation, monetary policy and U.S.  stock market conditions during the second half of the 20th century.  We estimate a latent variable VAR to examine how macroeconomic and policy shocks affect the condition of the stock market.  Further, we examine the contribution of various shocks to market conditions during particular episodes and find evidence that inflation and interest rate shocks had particularly strong impacts on market conditions in the postwar era.  Disinflation shocks promoted market booms and inflation shocks contributed to busts.  We conclude that central banks can contribute to financial market stability by minimizing unanticipated changes in inflation"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 7/10/2008.

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