 The Czech Equity Market - Its Effectiveness and Macroeconomic ConsequencesHelena Horská ()
Czech Journal of Economics and Finance (Finance a uver), 2005, vol. 55, issue 5-6, 283-301 Abstract: This paper examines features of the Czech stock market’s development from 1997 to 2003 and attempts to unveil the macroeconomic consequences of stock-price development. The analysis of the stock market’s behavior supports a cautionary stance on the hypothesis of the efficient-market theory, even in its weak form. Another finding, as regards the macroeconomic consequences of stock-price development, undermined the assumption of the positive wealth effect of rising stocks. In relation to GDP growth, the prediction power of the stock index proved rather limited. The Czech stock market can also function as an instrument of portfolio diversification, at least in relative terms, since the correlation to the Czech bond market was weak. Contrariwise, the correlation among the Czech, U.S., and European stock markets increased in time, restricting the room for portfolio diversification. Keywords: behavioral finance theory; Czech equity market; effective-market theory; European integration; portfolio theory (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:fau:fauart:v:55:y:2005:i:5-6:p:283-301 Access Statistics for this article More articles in Czech Journal of Economics and Finance (Finance a uver) from Charles University Prague, Faculty of Social Sciences Contact information at EDIRC. |
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