Macroeconomic Variables and Stock Price

Authors

  • Tapas Kumar Tripathy
  • Gautam Mitra

DOI:

https://doi.org/10.33516/rb.v41i2.19-28p

Keywords:

Macroeconomic Variables, Granger Causality Test, Stock Price, Multiple Regression.

Abstract

A contradictory opinion exists regarding relationship between macroeconomic variables and stock price. There is a school of thought that seeks to propound that stock price does not depend on macroeconomic fundamentals. On the other hand, there exists an opposite school of thought that those macroeconomic variables have very strong influence on stock price. In this paper we have ventured to test the first hypothesis with the help of 10 years monthly time series data collected from official websites of money control.com and Reserve Bank of India for a period from 2000 to 2010. After having stationary test we have gone for multiple regression analysis followed by granger causality test and attempted to examine the comparative relevance of two contradictory schools of thoughts. Another benefit perceived in our study was to know the degree of influence of different macroeconomic variables on stock price. Results depict varying degree of influence of different variables on stock price.

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Published

2015-07-01

How to Cite

Tripathy, T. K., & Mitra, G. (2015). Macroeconomic Variables and Stock Price. Research Bulletin, 41(2), 19–28. https://doi.org/10.33516/rb.v41i2.19-28p

Issue

Volume 41, Issue 2, July 2015

Section

Articles
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Scopus
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Europe PMC

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