Abstract
This study examines the dynamic interdependencies between private investment and the stock market for the US economy for the 1970 to 2003 period. The main findings are as follows. First, both investment and stock prices seem to adjust to disequilibria from each other in the long run. Second, past changes in nominal investment have a positive effect on stock prices in the short-run but changes in real investment do not. Third, changes in real stock prices do not affect real investment but past changes in nominal stock prices have a positive short-run effect on investment. Finally, the interest rate appears to affect both magnitudes in the short run but in a notable and negative manner the stock returns.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
