Relationship between Monthly Common Stock Prices and Monthly Inflation in India

Amit Kumar ()

International Journal of Economics, 2024, vol. 9, issue 1, 21 - 30

Abstract: Purpose: The purpose of the study is to scrutinise whether monthly inflation rate and monthly common stock prices are interlinked and if they are linked, then what is the kind of affiliation among the variables. Methodology: The paper has used the vector autoregression model (VAR) to determine whether there exists a relationship between monthly common stock prices and monthly inflation rates or not. Findings: The paper's findings can be summarised as no cointegration exists between monthly inflation rates and monthly stock prices, meaning there is no relationship (neither long nor short) between inflation and common stock prices. The other insight that can be concluded from the research is that there also doesn't exist any cause-and-effect relationship between the inflation rate & monthly common stocks.

Keywords: Inflation; Stock Prices; Demonetisation; Cointegration; Vector Auto-Regression (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:bdu:ijecon:v:9:y:2024:i:1:p:21-30:id:2296

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