ipl-logo

Macro Economic Volatility Essay

1455 Words6 Pages

Pak J Commer Soc Sci
Pakistan Journal of Commerce and Social Sciences
2013, Vol. 7 (2), 309-320
The Relationship between Macroeconomic Volatility and the Stock Market Volatility: Empirical Evidence from Pakistan

Muhammad Irfan Javaid Attari (Corresponding Author)
PhD Scholar, Shaheed Zulfikar Ali Bhutto Institute of Science and Technology
(SZABIST), Islamabad, Pakistan
E-mail: irfan92edu@yahoo.com

Luqman Safdar
MBA Student, Air University, Multan Campus, Pakistan
E-mail: luqmansafdar@rocketmail.com
Abstract
Macroeconomic variables and stock returns are corelated and analyzed in both countries either developed or developing.unfortunetly not for Pakistan.the study clearifies the analysis of time series of economic variables and stock market …show more content…

Fabozzi and Tunaru (2004) used GARCH-M, IGARCH and TAGARCH for Shenzhen and Shanghai markets.
The results show that the evidence of volatility clustering shows each market has a different GARCH model. The models used for testing the spill-over effect between two Chinese markets. Gan et al. (2006) found that the macroeconomic fluctuations are not fully judged by the New Zealand’s stock index.
Beltratti and Morana (2006) had investigated the relationship between stock market and macroeconomic volatility using S&P data and found the causality direction runs from stock market to macroeconomic variables which is most strong than vice versa.
Puah and Jayaraman (2007) had found that all variables show the long term relationship and stock prices are cointegrated with variables in Malaysian stock market. Liu and
Shrestha (2008) found that the long relation exists among stock prices and the macrofactors in China stock market. It also explains that stock market has significant impact in the long run. Gay (2008) had used ARIMA model and no relationship is observed among stock indexes, ER, and OP variables in Brazil, India, Russia and China. Adam and
George (2008) investigated for Ghana by using multivariate cointegration and the

Show More
Related

  • Analyzing Alexander Hamilton's Financial Crisis

    720 Words  | 3 Pages

    After the American Revolution, the United States found itself in a big financial hole. The country found economic trouble both inside the country and internationally. The U.S. had accumulated a massive amount of debt in addition to angering their revolutionary allies. Federalist Alexander Hamilton was named by President George Washington as the first Secretary of the Treasury. Hamilton was tasked with not only solving the nation’s financial difficulties, but also to put the economy in a position to succeed in the long term.

    Read More

  • Global Trade Dbq Essay

    841 Words  | 4 Pages

    Benjamin Franklin said, “No nation was ever ruined by trade.” During the early modern era, technological advancements in shipbuilding and increased knowledge on wind and current patterns made global trading possible. The increased flow of trade in the 1300s through 1800s created important social relations and economic opportunities due to the increased integration of foreign people and desire to be wealthiest and most powerful, while improving government, culture, and ideas in the modern world. Global trading increased the spread of people, which also increased the spread of religion and culture.

    Read More

  • Federal Reserve Synthesis Essay

    1629 Words  | 7 Pages

    In 2002, Ben Bernanke, then a member of the Federal Reserve Board of Governors, acknowledged publicly what economists have long believed. The Federal Reserve’s mistakes contributed to the “worst economic disaster in American history” (Bernanke 2002). Bernanke, like other economic historians, characterized the Great Depression as a disaster because of its length, depth, and consequences. The Depression lasted a decade, beginning in 1929 and ending during World War II. Industrial production plummeted.

    Read More

  • Hbu Recession Research Paper

    740 Words  | 3 Pages

    The effect of the recession on HBCUs As we know a recession is defined as a temporary decline in income due to reduced trade and production activity. Everything in society is ran by a sort of system. For example, in order for a company to thrive it must have two things, workers and production. If there are not any workers, than there is little to no production unless the company is ran by machines. If there is not any production than the chances of workers being laid off increase based on how many people are needed for certain jobs through out the company.

    Read More

  • Federal Reserve Essay

    729 Words  | 3 Pages

    On December 23rd, 1913, President Woodrow Wilson signed the Federal Reserve act. This act created the Federal Reserve, which is a central bank of the United States. It has a Federal Reserve Board in Washington D.C. along with twelve regional banks located all across the country. The Federal Reserve has two main jobs. One job is to regulate all banks in the United States and ensure the health of the banking system overall.

    Read More

  • Charles Wheelan's Naked Economics

    197 Words  | 1 Pages

    In Naked Economics, Charles Wheelan aims to break down economics into simple terms, for people who have no previous experience with economics. He attempts to explain concepts in simple terms for readers so that they can quickly grasp the subject. One of the first topics that Wheelan explains is what a free market economy is. He states that in a free market economy, people act in their own self-interest, which in turn raises the standard of living for everyone.    

    Read More

  • The Presidential Cycles Influence On The Stock Market

    797 Words  | 4 Pages

    New York Stock and Exchange Board was found March 8, 1817. In the years that followed, people from all walks of life have developed beliefs that define their logic about the stock market cycles. Throughout human history, humans have attempted to relate cycles (natural and artificial) to all aspects of life as we know it. These beliefs range from planetary alignment, prophesy, modern computations, outcome of sport events, and even presidential elections.

    Read More

  • Essay On Microaggressions

    558 Words  | 3 Pages

    Microaggressions matter in all classes of people whether they are men, women, LGBT (lesbian, gay, bisexual, or transgender), straight, black, white, Hispanic, or other. These small interactions seem insignificant until you affect someone’s self-esteem. Little by little, it chips away at that image in their mind of who and what they are as a person. Although, many microaggressions are unintended, more often than not, they will have a negative effect on the receiving end.

    Read More

  • Milton Friedman's Impact On The Economy

    119 Words  | 1 Pages

    The economic philosopher I believe has the most positive effect on the United States economy today is Milton Friedman. He helped start the Chicago School of Economics, and he also agreed with other economic philosopher, Adam Smith, that markets should be mostly free, but have some parameters maintained by the government. He disagreed with John Maynard Keynes and believed that inflation could be avoided by controlling the money supply. Inflation is a general increase in prices. He was also in favor of floating exchange in rates for the international markets, a negative income tax, and school vouchers.

    Read More

  • Naked Economics Chapter 8 Summary

    493 Words  | 2 Pages

    In chapter 8, the core economic principle that displays itself often is The Consequences of Choices Lie in the Future. This principle presents the idea that what we are doing in today’s economy will have an impact on the future. Whether it is decisions on cutting benefits or raising taxes, any of these could cripple our futures economy. In the chapter, it discusses the fiscal policy and how it saved America’s economy after the depression. By monitoring the nation 's spending budget and taxes, so another depression or a recession does not occur.

    Read More

  • John Maynard Keynesian Economics Summary

    2358 Words  | 10 Pages

    John Maynard Keynes was born on the 5th of June 1883 in Cambridge, England. He was the eldest of 3 children who were born into an Upper middle class family. John Neville Keynes, his father, was a lecturer in moral sciences in The University of Cambridge and was an Economist. He divided economics into “Positive Economy” which is the study of what is and the way the economy works, “Normative Economy” which is the study of what should be and the “Art of Economics” which relates the lessons learned in positive economics to the normative goals determined in normative economics. His main works were 1) Studies and Exercises in Formal Logic (1884) and 2)

    Read More

  • Similarities And Differences Between The Single Index Model And Capital Asset Pricing Model

    1217 Words  | 5 Pages

    Outline the similarities and differences between the Single Index Model (SIM) and the Capital Asset Pricing Model (CAPM). Justify which of the two models makes a better assessment of return of a security (25 marks). To reduce a firm’s specific risk or residual risk a portfolio should have negative covariance or rather it should have no variance at all, for large portfolios however calculating variance requires greater and sophisticated computing power. As such, Index models greatly decrease the computations needed to calculate the optimum portfolio. The use of such Index models also eliminates illogical or rather absurd results.

    Read More

  • Bernanke's Response To The Recession

    170 Words  | 1 Pages

    Bernanke’s decision to employ extremely stimulative measures was a response to the severity of the recession. A second reason was that the financial crisis accompanying the recession eroded the capital of many banks and made them more hesitant to lend. But that remedy was insufficient to counter the most recent recession.

    Read More

  • Single Index Model And Capital Asset Pricing Model

    1129 Words  | 5 Pages

    Outline the similarities and differences between the Single Index Model (SIM) and the Capital Asset Pricing Model (CAPM). Justify which of the two models makes a better assessment of return of a security (25 marks). To reduce a firm’s specific risk or residual risk a portfolio should have negative covariance or rather it should have no variance at all, for large portfolios however calculating variance requires greater and sophisticated computing power. As such, Index models greatly decrease the computations needed to calculate the optimum portfolio. The use of such Index models also eliminates illogical or rather absurd results.

    Read More

  • Roles Of Money In Macroeconomics Essay

    1772 Words  | 8 Pages

    ROLE OF MONEY IN MACROECONOMICS 1. Introduction Money can be seen as the medium of exchange which is acceptable while transaction is being undertaken between two parties. Some of the common forms of money are: - Commodity money: This is when the value of the good represents its value in terms of money like gold or silver. - Fiat money: This is when the value of the good is less than the value it represents - Bank money: It is the accounting credits that can be used by the depositor Money serves a variety of crucial functions in the economy and this is why it has gained an unparalleled influence in the matters of economy at micro as well as macro levels. Some of the features of money that make it so important for any economy are as follows:

    Read More

More about Macro Economic Volatility Essay

Open Document