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The Relationship of Inflation and Stock Return: An Empirical Study of the Hedging or Wealth Effects in Bangladesh
International Journal of Finance and Banking Research
Volume 1, Issue 2, December 2015, Pages: 24-31
Received: Oct. 27, 2015; Accepted: Nov. 14, 2015; Published: Dec. 14, 2015
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Authors
Md. Sharif Ullah Mazumder, Department of Economics and Finance, University of Wyoming, Laramie, Wyoming, USA
David Aadland, Department of Economics and Finance, University of Wyoming, Laramie, Wyoming, USA
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Abstract
The relationship between stock market returns and inflation is a well studied area in economics and financial economics. Theoretical and empirical researches on this topic establish that inflation causes stock market return. In this paper we study on Bangladesh stock markets return and inflation and find interesting results that stock market returns cause inflation. This empirical study has been conducted on basis of the monthly stock market index and CPI data. The result of the study can be a roadmap to the policymaker of Bangladesh to control the inflation within the tolerance level by adopting well regulation on stock market.
Keywords
Stock Market, Inflation, DSE Index, Granger Causality Effect
To cite this article
Md. Sharif Ullah Mazumder, David Aadland, The Relationship of Inflation and Stock Return: An Empirical Study of the Hedging or Wealth Effects in Bangladesh, International Journal of Finance and Banking Research. Vol. 1, No. 2, 2015, pp. 24-31. doi: 10.11648/j.ijfbr.20150102.12
Copyright
Copyright © 2015 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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