Stock Market Prices and the Macroeconomics of Emerging Economies: the Case of India

Upadhyaya, Kamal P.; Nag, Raja; Mixon, Franklin G.

doi:10.12775/dem.2018.002

Cited by 6 publications

(3 citation statements)

References 24 publications

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“…In terms of the stock market, the positively signed and significant coefficient estimate attached to the SENSEX in (2) above indicates that increasing stock prices has a positive and significant effect on real output in the long run. This finding is consistent with the notion that an increase (or decrease) in stock prices works to increase (or decrease) overall economic activity, corporate profits, and expected future cash flows, which in turn increases (decreases) stock prices and aggregate output (Upadhyaya et al 2018). 6 Finally, the coefficient estimate attached to OP is negative and statistically significant, indicating that an increase in oil prices negatively affects aggregate output in the long run in an oil-importing country such as India.…”

Section: Johansen's Cointegration Testsupporting

confidence: 89%

Causal Relationships between Oil Prices and Key Macroeconomic Variables in India

Upadhyaya,

Nag,

Mixon

2023

IJFS

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India is among the largest and fastest-growing economies in the world. To continue its growth, energy is and will continue to be one of its most important considerations. With a population of over one billion, India is the third largest consumer of petroleum on the globe. To maintain this ranking, India imports a large percentage of its total oil consumption. Given India’s current position as a large importer of oil, how does oil price volatility affect the Indian economy? This paper examines the effect of oil price volatility on inflation, economic growth, and the stock market in India. Statistical tests suggest that the overall price level, the real effective exchange rate, and oil prices are negatively related to aggregate output in the long run. Granger causality test results derived from a vector error correction model support bidirectional causality between oil prices and aggregate output, indicating that a change in oil prices also affects aggregate output in the short run.

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Section: Johansen's Cointegration Testsupporting

confidence: 89%

Causal Relationships between Oil Prices and Key Macroeconomic Variables in India

Upadhyaya,

Nag,

Mixon

2023

IJFS

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“…purchasing power. There is a positive association between stock prices and exchange rates when the local currency depreciates and local enterprises become more competitive, thus, increasing exports (Suriani et al, 2015;Upadhyaya, Nag, & Mixon, 2018;Demir, 2019;Luwihono et al, 2021). Alternatively, empirical evidence demonstrates that the exchange rate has a long-run negative association with the stock market (Amado & Choon, 2020).…”

Section: Introductionmentioning

confidence: 99%

Asymmetric effects of inflation rate changes on the stock market index: The case of Indonesia

Sia

Leong

Puah

2023

Journal of International Studies

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Over the years, macroeconomic fundamentals and the stock market were found to have symmetrical relationship in numerous scientific investigations. These fundamentals provide crucial knowledge regarding stock price indices by providing forecasts for the future and information on the current status of the economy. This study employs a Nonlinear Autoregressive Distributed Lags (NARDL) model to fill in the research gap by estimating the asymmetric relationship between inflation and stock market from 1996 to 2020. The study suggests that inflation has a long-run and short-run asymmetric affect on the stock price, while both positive and negative inflation changes harm stock prices. As it reveals, the asymmetric impact of inflation on the stock market, this study can assist investors and businesses in making well-informed decisions that result in a more efficient allocation of resources, ultimately benefiting the economy. Additionally, policymakers can utilize these findings to design effective strategies for managing inflation, stabilizing prices, promoting economic growth, and ensuring financial market stability.

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“…Other countries target inflation rates with monetary policy, but, even so, monetary policy affects exchange rates, regardless of which target monetary authorities choose. Most of the studies in this area focus either on large economy such as India (Upadhyaya, Nag and Mixon Jr, 2018) or developed economies such as the USA (Ratanapakorn and Sharma, 2007). There is a relative dearth of such studies in small countries like Nepal.…”

Section: Introductionmentioning

confidence: 99%

An Inquiry into the Effect of the Interest Rate, Gold Price, and the Exchange Rate on Stock Exchange Index: Evidence from Nepal

Devkota

Panta

2018

DEM

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This study examines the causal relationship between the Nepalese Stock Exchange (NEPSE) Index, the interest rate, gold price, and the USD exchange rate in Nepal. The monthly time series data from January 2006 to June 2018 are used. Time series properties of the data are diagnosed using the Ng-Perron unit root test and Johansen's cointegration test. Finally, the Granger causality test based on the Vector Error Correction Model (VECM) is used to find the direction of causation, and to model the short and long-run relationships between the variables. The findings suggest that there exists a feedback relationship between the NEPSE Index and the interest rate, and there exists a unidirectional causation from the gold price to both the exchange rate and the interest rate. There is also a unidirectional causation from the exchange rate to the NEPSE Index during the sample period. These findings have implications for government agencies, investors, researchers, stakeholders, and others interested in the topic.

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Stock Market Prices and the Macroeconomics of Emerging Economies: the Case of India

Cited by 6 publications

References 24 publications

Causal Relationships between Oil Prices and Key Macroeconomic Variables in India

Causal Relationships between Oil Prices and Key Macroeconomic Variables in India

Asymmetric effects of inflation rate changes on the stock market index: The case of Indonesia

An Inquiry into the Effect of the Interest Rate, Gold Price, and the Exchange Rate on Stock Exchange Index: Evidence from Nepal

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