The Relationship of Inflation and Stock Return: An Empirical Study of the Hedging or Wealth Effects in Bangladesh

Md. Sharif Ullah Mazumder; David Aadland

doi:doi:10.11648/j.ijfbr.20150102.12

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The Relationship of Inflation and Stock Return: An Empirical Study of the Hedging or Wealth Effects in Bangladesh

Md. Sharif Ullah Mazumder, David Aadland

Published in International Journal of Finance and Banking Research (Volume 1, Issue 2)

Received: 27 October 2015 Accepted: 14 November 2015 Published: 14 December 2015

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Abstract

The relationship between stock market returns and inflation is a well studied area in economics and financial economics. Theoretical and empirical researches on this topic establish that inflation causes stock market return. In this paper we study on Bangladesh stock markets return and inflation and find interesting results that stock market returns cause inflation. This empirical study has been conducted on basis of the monthly stock market index and CPI data. The result of the study can be a roadmap to the policymaker of Bangladesh to control the inflation within the tolerance level by adopting well regulation on stock market.

Published in	International Journal of Finance and Banking Research (Volume 1, Issue 2)
DOI	10.11648/j.ijfbr.20150102.12
Page(s)	24-31
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2015. Published by Science Publishing Group

Keywords

Stock Market, Inflation, DSE Index, Granger Causality Effect

References

[1]	Damodar N Gujrati and Dawn C Porter, Basic Econometrics, 5^th Edition, McGraw Hill.
[2]	Website of Dhaka Stock Exchange (www.dsebd.org).
[3]	Website of Bangladesh Bank (www.bangladeshbank.org).
[4]	Boudoukh, J., & Richardson, M. (1993). Stock returns and inflation: A long-horizon perspective. The American economic review, 1346-1355.
[5]	Ahmed, S., & Mortaza, M. G. (2010). Inflation and economic growth in Bangladesh: 1981-2005 (No. id: 3033).
[6]	Muktadir-al-Mukit, D. (2013). Effects of Interest Rate and Exchange Rate on Volatility of Market Index at Dhaka Stock Exchange. Journal of Business and Technology (Dhaka), 7(2), 1-18.
[7]	Ikoku, A. E., & Hosseini, A. (2008). The Comparative Performance of African Stock Markets: Nominal, Real and US Dollar Returns. International Journal of Business, 13(3), 251.
[8]	Boyd, J. H., Levine, R. E., & Smith, B. D. (1996). Inflation and financial market performance (Vol. 9617). Federal Reserve Bank of Cleveland.
[9]	Ibrahim, T. M., & Agbaje, O. M. (2013). The Relationship between Stock Return and Inflation in Nigeria. European Scientific Journal, 9(4).
[10]	Fama, E. F., & Schwert, G. W. (1977). Asset returns and inflation. Journal of financial economics, 5(2), 115-146.

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APA Style

Md. Sharif Ullah Mazumder, David Aadland. (2015). The Relationship of Inflation and Stock Return: An Empirical Study of the Hedging or Wealth Effects in Bangladesh. International Journal of Finance and Banking Research, 1(2), 24-31. https://doi.org/10.11648/j.ijfbr.20150102.12

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ACS Style

Md. Sharif Ullah Mazumder; David Aadland. The Relationship of Inflation and Stock Return: An Empirical Study of the Hedging or Wealth Effects in Bangladesh. Int. J. Finance Bank. Res. 2015, 1(2), 24-31. doi: 10.11648/j.ijfbr.20150102.12

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AMA Style

Md. Sharif Ullah Mazumder, David Aadland. The Relationship of Inflation and Stock Return: An Empirical Study of the Hedging or Wealth Effects in Bangladesh. Int J Finance Bank Res. 2015;1(2):24-31. doi: 10.11648/j.ijfbr.20150102.12

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@article{10.11648/j.ijfbr.20150102.12,
  author = {Md. Sharif Ullah Mazumder and David Aadland},
  title = {The Relationship of Inflation and Stock Return: An Empirical Study of the Hedging or Wealth Effects in Bangladesh},
  journal = {International Journal of Finance and Banking Research},
  volume = {1},
  number = {2},
  pages = {24-31},
  doi = {10.11648/j.ijfbr.20150102.12},
  url = {https://doi.org/10.11648/j.ijfbr.20150102.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20150102.12},
  abstract = {The relationship between stock market returns and inflation is a well studied area in economics and financial economics. Theoretical and empirical researches on this topic establish that inflation causes stock market return. In this paper we study on Bangladesh stock markets return and inflation and find interesting results that stock market returns cause inflation. This empirical study has been conducted on basis of the monthly stock market index and CPI data. The result of the study can be a roadmap to the policymaker of Bangladesh to control the inflation within the tolerance level by adopting well regulation on stock market.},
 year = {2015}
}

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TY  - JOUR
T1  - The Relationship of Inflation and Stock Return: An Empirical Study of the Hedging or Wealth Effects in Bangladesh
AU  - Md. Sharif Ullah Mazumder
AU  - David Aadland
Y1  - 2015/12/14
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JO  - International Journal of Finance and Banking Research
SP  - 24
EP  - 31
PB  - Science Publishing Group
SN  - 2472-2278
UR  - https://doi.org/10.11648/j.ijfbr.20150102.12
AB  - The relationship between stock market returns and inflation is a well studied area in economics and financial economics. Theoretical and empirical researches on this topic establish that inflation causes stock market return. In this paper we study on Bangladesh stock markets return and inflation and find interesting results that stock market returns cause inflation. This empirical study has been conducted on basis of the monthly stock market index and CPI data. The result of the study can be a roadmap to the policymaker of Bangladesh to control the inflation within the tolerance level by adopting well regulation on stock market.
VL  - 1
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Author Information

Md. Sharif Ullah Mazumder

Department of Economics and Finance, University of Wyoming, Laramie, Wyoming, USA
David Aadland

Department of Economics and Finance, University of Wyoming, Laramie, Wyoming, USA

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APA Style

Md. Sharif Ullah Mazumder, David Aadland. (2015). The Relationship of Inflation and Stock Return: An Empirical Study of the Hedging or Wealth Effects in Bangladesh. International Journal of Finance and Banking Research, 1(2), 24-31. https://doi.org/10.11648/j.ijfbr.20150102.12

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ACS Style

Md. Sharif Ullah Mazumder; David Aadland. The Relationship of Inflation and Stock Return: An Empirical Study of the Hedging or Wealth Effects in Bangladesh. Int. J. Finance Bank. Res. 2015, 1(2), 24-31. doi: 10.11648/j.ijfbr.20150102.12

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AMA Style

Md. Sharif Ullah Mazumder, David Aadland. The Relationship of Inflation and Stock Return: An Empirical Study of the Hedging or Wealth Effects in Bangladesh. Int J Finance Bank Res. 2015;1(2):24-31. doi: 10.11648/j.ijfbr.20150102.12

Copy | Download

@article{10.11648/j.ijfbr.20150102.12,
  author = {Md. Sharif Ullah Mazumder and David Aadland},
  title = {The Relationship of Inflation and Stock Return: An Empirical Study of the Hedging or Wealth Effects in Bangladesh},
  journal = {International Journal of Finance and Banking Research},
  volume = {1},
  number = {2},
  pages = {24-31},
  doi = {10.11648/j.ijfbr.20150102.12},
  url = {https://doi.org/10.11648/j.ijfbr.20150102.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20150102.12},
  abstract = {The relationship between stock market returns and inflation is a well studied area in economics and financial economics. Theoretical and empirical researches on this topic establish that inflation causes stock market return. In this paper we study on Bangladesh stock markets return and inflation and find interesting results that stock market returns cause inflation. This empirical study has been conducted on basis of the monthly stock market index and CPI data. The result of the study can be a roadmap to the policymaker of Bangladesh to control the inflation within the tolerance level by adopting well regulation on stock market.},
 year = {2015}
}

Copy | Download

TY  - JOUR
T1  - The Relationship of Inflation and Stock Return: An Empirical Study of the Hedging or Wealth Effects in Bangladesh
AU  - Md. Sharif Ullah Mazumder
AU  - David Aadland
Y1  - 2015/12/14
PY  - 2015
N1  - https://doi.org/10.11648/j.ijfbr.20150102.12
DO  - 10.11648/j.ijfbr.20150102.12
T2  - International Journal of Finance and Banking Research
JF  - International Journal of Finance and Banking Research
JO  - International Journal of Finance and Banking Research
SP  - 24
EP  - 31
PB  - Science Publishing Group
SN  - 2472-2278
UR  - https://doi.org/10.11648/j.ijfbr.20150102.12
AB  - The relationship between stock market returns and inflation is a well studied area in economics and financial economics. Theoretical and empirical researches on this topic establish that inflation causes stock market return. In this paper we study on Bangladesh stock markets return and inflation and find interesting results that stock market returns cause inflation. This empirical study has been conducted on basis of the monthly stock market index and CPI data. The result of the study can be a roadmap to the policymaker of Bangladesh to control the inflation within the tolerance level by adopting well regulation on stock market.
VL  - 1
IS  - 2
ER  -

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