英语论文网

ation; Gultekin (1983) researched more than seven EU countries’ and American’s information and somewhat supported theory of Fama. These experts made a study on the data after World War Two, almost all of them attempted to prove that during the war periods, especially in American market, the relationship is negative between inflation and stock prices. Sharpe (2002) made a study of Standard & Poor’s Indices 1979-1998 and drew a conclusion that the higher inflation always corresponded to the lower stock prices. Ritter and Warr (2002) inspected the data of US stock market from 1983 to 2000, and came to the conclusion that low inflation rate would be the birth of the stock market bull. Geske and Roll (1983) further developed Fama’s theory; they think that the changes of money supply and money demand are related to the relationship. So they attempted to examine the behaviors of money supplier. They argued that the central bank implemented a counter-cyclical monetary policy caused by the budget deficit, and the policy leading to the negative correlation between stock prices and inflation. Their assumption was that when the real economy was under shock the central bank would adopt the counter-cyclical monetary policy, the analysis approach as follows: the unforeseen fall of stock prices was the signal to anticipate the decline of future economic activities, the decline of future economic output would reduce the government revenues, however people often expected government expenditure unchanged, which would certainly make the investors believe that government would have a financial deficit. Under the circumstances of the fiscal deficit, the government would issue more nominal money, which government action cause the inflation rising, so that leading to the negative correlation between stock prices and inflation. They also surveyed the relationship between US stock prices and inflation after World War Two, and then also conclude a negative relationship.

Kaul (1987) stated that money supply and money demand, in realistic, play a decisive role in effecting the relationship. He sets out that money demand and counter-cyclical money supply could explain the negative correlation between postwar stock prices and inflation in the United States. He also pointed out that if money demand is accompanied by the pro-cyclical money supply, then the relationship between stock prices and inflation might be positive. Kaul’s standpoint can be expressed as follows: if real economic growth (downturn) causes the increase (decrease) in money demand, and then money supply goes up (goes down), then it would cause a corresponding rise (decline)The Assignment is provided by UK Assignment in price of commodities. Therefore, the pro-cyclical monetary policy would give rise to the positive relationship between stock prices and inflation; counter-cyclical monetary policy would lead to the negative relationship.

According to Kaul’s theory, Graham (l996) made an empirical test utilizing US data from l953 to 1990; the results reflect that in different periods the relationship present different features: before 1976 and after 1982, there was negative relevance between stock price and inflation. Between 1976 and 1982, the relationship was positive, which is worth considered that during different periods the relationship can pres本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。