Stock returns and inflation: further tests of the role of the central bank

Article Abstract:

The relationshipbetween stock returns and inflation is investigated using data from different monetary policy periods. The inverse relationship between inflation and stock returns is not entirely due to federal debt monetization. Although evidence of a countercyclical monetary policy is present in some time periods, there is sufficient evidence to suggest that it is not responsible for the inverse relationship between unexpected inflation and stock returns.

Economic aspects, Influence, Investments, Federal Reserve banks

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The relation between contract duration and the inflation uncertainty: further evidence

Article Abstract:

A test determining the negative relation between contract duration and inflation uncertainty finds that results are not much affected by the use of adjusted uncertainty in place of unadjusted uncertainty. The results however, do not extend to smaller samples based on two-digit SIC codes and suggesting that findings of a negative relation may be driven y a small number of industries.

Econometrics & Model Building, Models, Econometrics, Rational expectations (Economics), Business models

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Are stocks a hedge against inflation? International evidence using a long-run approach

Article Abstract:

Test results show that, for most analyzed countries, stocks tend to hold their value in relation to increases in goods prices, regardless of whether those increases arise from the monetary or the real sector. A notable exception to this finding is that, in the US, following real-output inflationary shocks, stocks do not hold their value in relation to goods prices.

Prices, Research, Evaluation, Stocks

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