Theoretical and Applied Economics
No. 7 / 2011 (560)
Effects of Macroeconomic Variables on the Stock Market: The Case of the Czech Republic
Southeastern Louisiana University, USA
Abstract. Applying the GARCH model, this paper finds that the Czech stock market index is positively associated with real GDP and the German and US stock market indexes, is negatively influenced by the ratio of government borrowing to GDP, the domestic real interest rate, the CZK/USD exchange rate, the expected inflation rate and the euro area government bond yield, and exhibits a quadratic relationship with the ratio of M2 to GDP. It suggests that the Czech stock market index and the M2/GDP ratio have a positive (negative) relationship if the M2/GDP ratio is less (greater) than the critical value of 60.0%. Hence, to promote a robust stock market, the authorities are expected to pursue or maintain economic growth, fiscal discipline, currency appreciation, a relatively low interest rate and expected inflation rate, and the M2/GDP ratio which is below the critical value of 60.0%.
Contents
Characteristics of Criteria for Selecting Investment Projects under Uncertainty
Online Services Management Support for an Intelligent Locality
The Meanings of “Made in Romania” among the Romanian Consumers
Forms and Strategies of the Banks to Enter on a Foreign Market
Effects of Macroeconomic Variables on the Stock Market: The Case of the Czech Republic
The European Recovery Economic Plan and Quality of Public Finances – Instruments for Monitoring and Improving Fiscal and Economic Systems
An Optimization of the Risk Management using Derivatives
Towards to the Respiritualization of the Economics
Financial Crisis from the Trust and Loss Aversion Perspective in Emerging Romanian Capital Market
The Contribution of the Neo-Schumpeterian Approach to the Development of the Economic Theory: Emphasis on the Meso-Economic Level
Dobrogea as Romanian Tourism Micro-destination
The Rethinking of the Economic Activity Based on Principles of Eco-Efficiency
The Correlation between the Conceptual System of the Political Economy and that of the Accountancy – a Solution for Reducing the Risks Connected to the Administration Activities in any Stage of the Economic