Alternative Evaluation of S&P 500 index in Relation to Quantitative Easing

Martin Sirucek () and Ondřej Galečka

MPRA Paper from University Library of Munich, Germany

Abstract: The paper focuses on the impact of money supply on the S&P 500 stock index. The main goal is by using selected indicators identify the bubble. That is meaning, according to the results bring to the investors recommendations what indicator they should to use for early identification of the price bubble. The paper deals with two „standard” indicator and one „behavioural”. The first use the rational price bubble variable and compare it with the standard deviation, the second one deals with the ratio market capitalisatuion and GDP. As „behaioural” indicator analyses of EPUI and VIX index was used. Empirical results were comfirmed by the „behaivoural”variables. Higher accuracy of results acquired the second empirical method, where the divisor was used.

Keywords: quantitative easing; money supply; MZM; S&P 500; price bubble; policy uncertainty index (search for similar items in EconPapers)
JEL-codes: G11 G12 G17 (search for similar items in EconPapers)
Date: 2016-06-10
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Published in Forum Scientiae Oeconomia 1.5(2017): pp. 5-18

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