Federal deficits and the stock market

V. Vance Roley and Lawrence D. Schall

Economic Review, 1988, vol. 73, issue Apr, 17-27

Abstract: Empirical evidence shows that federal budget deficits have historically tended to increase stock market prices. Because deficits rose to unprecedented levels in the 1980s, however, increasing concern about their impact on interest rates and inflation may have contributed to the October 1987 decline in stock prices.

Keywords: Deficit financing; Budget; Stock market (search for similar items in EconPapers)
Date: 1988
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