Inflation and asset returns
| Autor: | Michelle L. Barnes, John H. Boyd, Bruce D. Smith |
|---|---|
| Rok vydání: | 1999 |
| Předmět: |
Rate of return
Economics and Econometrics Financial economics Financial market Equity (finance) Astrophysics::Cosmology and Extragalactic Astrophysics Monetary economics Asset return Relative price General Relativity and Quantum Cosmology Continuously compounded nominal and real returns Economics Real interest rate Economic stability Finance |
| Zdroj: | European Economic Review. 43:737-754 |
| ISSN: | 0014-2921 |
| Popis: | Sustained inflation is detrimental to long-run growth and the financial system. A recent theoretical literature suggests that high inflation implies low real returns on assets. These low returns exacerbate informational frictions, interfering with the functioning of financial markets and the allocation of investment. We investigate the plausibility of an inverse relationship between inflation and real returns. Inflation and nominal equity returns are negatively correlated or uncorrelated for all low-to-moderate inflation economies examined. Safe nominal rates of return and inflation are only weakly positively correlated. However, for high inflation economies inflation and nominal returns are strongly positively correlated. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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