Monetary rules and stock market value

Article Abstract:

A study investigated the influence of monetary policy on equity dividends. It was demonstrated that the stock market response relies on the intertemporal elasticity of substitution of investors and on parameters of the real growth process. Furthermore, by altering money supply in response to real conditions, a monetary authority can influence both the average level and the volatility of future real equity dividends. Thus, monetary rules targeting a specific nominal variable can have ramifications for aggregate wealth and for the real sector.

Dividends

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Risk aversion and stock market volatility

Article Abstract:

A continuous state asset pricing, utilizing autocorrelated growth of output, is used to model the relationship of relative risk aversion to stock market volatility. Calculation of stock price output elasticity is used to show a complex, non-monotonic relationship between volatility and risk aversion, as well as their relation to the error process for output.

Speculation, Risk (Economics), Stock price forecasting

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A reexamination of market returns, discount rate changes, and market efficiency

Article Abstract:

Discount rate change announcements by the US Federal Reserve provide an immediate stock market effect. Research shows that press releases detailing policy change in the discount rate result in immediate price adjustment feedback during the hour of announcement. Adjustment-type announcements on the other hand are found to havelittle effect on the market.

Influence, Federal Reserve banks

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