[PDF] Impact Of Monetary Policy On Stock Market Development eBook

Author : Ebele Nwokoye
Publisher :
Page : 22 pages
File Size : 19,62 MB
Release : 2019
Category :
ISBN :

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The unsustainable and decreasing contribution of the Nigeria stock market to economic growth and development is the rationale for this study. Previous studies were unable to fully address the core developmental problems of the stock market in terms of its contribution to economic growth. These studies focused on how the monetary authorities can stabilize the stock market and reduce its volatility but ignored issues bordering on the contribution of the stock market to economic growth, which of course is the essence of any stock market and as such characterize its development. Consequently, the objective of this study is to investigate the impact of monetary policy on the development of the stock market in Nigeria. The study period covered from 1981 to 2015. Cointegration and vector error correction modelling (VECM) were employed for the analysis. The cointegration test indicates that there exist long run equilibrium relationship among the variables of the model. VECM result indicated that monetary policy, through the growth rate of money supply has impacted positively and significantly on the development of the stock market in Nigeria. Also, findings further indicated that prime lending rate has had a negative impact on the development of the stock market in Nigeria. The study recommended among others, that the Central Bank of Nigeria (CBN) should use its growth rate of money supply to further boost the development of the stock market but must however be mindful of the channeling of the increase in money supply in order to curtail the possible negative impact of inflation.

Author :
Publisher :
Page : 41 pages
File Size : 15,1 MB
Release : 2009
Category : Economic development
ISBN :

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In this paper, we examine the impact of financial market development on capital accumulation and inflation. In particular, we explore this issue in a setting in which banks provide risk pooling services. Furthermore, money overcomes incomplete information to facilitate transactions between individuals. In contrast to previous work, we incorporate a market for equity by allowing individuals to trade capital across generations. Interestingly, we find that the quantitative impact of the stock market may be indeterminate -- the economy may respond with significant gains in capital accumulation or relatively little. Consequently, it is not clear how much financial development will drive down inflation in the long-run. In the case of unique steady-states, expansionary monetary policy causes long-run capital accumulation to fall. However, the response is much stronger in the presence of a stock market. Furthermore, the market for capital may lead to a different qualitative response to monetary policy. That is, financial development may lead to a Tobin effect from inflation. Finally, by studying dynamics, we demonstrate that financial markets and monetary policy can have a significant impact on volatility in the economy. In this manner, there is additional scope for monetary policy to stabilize the economy at higher levels of financial development.

Author : Mr.Ralph Chami
Publisher : International Monetary Fund
Page : 26 pages
File Size : 17,51 MB
Release : 1999-02-01
Category : Business & Economics
ISBN : 145184395X

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This paper argues that the stock market is an important channel of monetary policy. Monetary policy affects real economic activity because inflation levies a property tax on stocks in addition to an income tax on dividend payments. Inflation thus taxes stocks more heavily than it does bonds. Households alter their required rate of return as inflation changes, and firms adjust production in order to satisfy their shareholders’ demands. As the stock market channel grows in importance, the appropriate intermediate target for the central bank is the price level, with price stability being the ultimate goal.

Author : Ramesh Chandra Das
Publisher : Emerald Group Publishing
Page : 432 pages
File Size : 45,50 MB
Release : 2019-09-02
Category : Business & Economics
ISBN : 1789733197

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The Impacts of Monetary Policy in the 21st Century illustrates the effect of financial policies upon global economic indicators, with special reference made to issues effecting East Asian nations generally and with a particular focus on Indian economic development since 2000.

Author : William Curt Hunter
Publisher : MIT Press
Page : 650 pages
File Size : 15,78 MB
Release : 2005
Category : Business & Economics
ISBN : 9780262582537

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A study of asset price bubbles and the implications for preventing financial instability.

Author : K. N. Dhakshayini
Publisher : Independent Author
Page : 0 pages
File Size : 31,15 MB
Release : 2023-01-15
Category : Business & Economics
ISBN : 9781805459040

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Liberalization and globalization are the twin forces that have transformed the Indian economy in the last two decades. Changes are rapid and visible. They have touched almost all the sectors of our economy, in particular the Indian Capital market and Indian industry. The Indian capital market plays a significant role in the growth of the financial sector. A robust stock market can promote economic growth by bringing in domestic as well as foreign investments. The growth of the economy depends upon multiple elements, such as fundamental macroeconomic factors, investment climate, performance of industry sectors and global business environment. An understanding of the macroeconomic factors that influence the movement of stock prices and the role of sector indices, that represent a variety of industries in economic growth, is essential for investors as well as policy makers.

Author : Stephen Giovanni Cecchetti
Publisher : Centre for Economic Policy Research
Page : 164 pages
File Size : 36,99 MB
Release : 2000
Category : Business & Economics
ISBN : 9781898128533

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Concludes the role of asset prices in monetary policy is one of the most important, and difficult, questions confronting central banks.