Stocks as Hedge against Inflation in Pakistan: Evidence from ARDL Approach

Muhammad Shahbaz, Faridul Islam () and Ijaz Ur Rehman

Global Business Review, 2016, vol. 17, issue 6, 1280-1295

Abstract: This article implements autoregressive distributed lag (ARDL) bounds testing approach to cointegration to explore whether or not stocks are good hedge against inflation in case of a transition economy like Pakistan, using annual data for the period 1971–2008. Ng–Perron (2001) unit root test is applied to determine the stationarity of the series. The results suggest that stocks act as good hedge against inflation both in the long and short runs. The findings should help formulate appropriate policy to encourage investment in financial markets and thereby promote economic growth.

Keywords: Stock returns; inflation; ARDL bounds testing; Ng–Perron test (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0972150916660393 (text/html)

Related works:
Working Paper: Stocks as Hedge against Inflation in Pakistan: Evidence from ARDL Approach (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:globus:v:17:y:2016:i:6:p:1280-1295

DOI: 10.1177/0972150916660393

Access Statistics for this article

More articles in Global Business Review from International Management Institute
Bibliographic data for series maintained by SAGE Publications ().