Stock Market Responses to Monetary and Fiscal Policies: Case Studing China, India, Indonesia, and Malaysia

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Author(s): Elif Erer (Independent Researcher, Turkey)and Deniz Erer (Independent Researcher, Turkey)
Copyright: 2023
Pages: 18
Source title: Research Anthology on Macroeconomics and the Achievement of Global Stability
Source Author(s)/Editor(s): Information Resources Management Association (USA)
DOI: 10.4018/978-1-6684-7460-0.ch009

Keywords: Business & Management / Business Science Reference / Economics & Economic Theory / Economics and Economic Theory

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Abstract

This study analyzes the short-run and long-run effects of interaction between fiscal and monetary policies on stock market performance in four emerging Asian economies, which are China, India, Indonesia, and Malaysia, by using ARDL model. The study covers the period of 2003:Q1-2020:Q1. The findings from this study show monetary and fiscal policies play an important role in determining stock market returns. Also, the results theoretically support Richardian neutrality hypothesis for China and Indonesia, Keynesian positive effect hypothesis for India, and classical crowding out effect hypothesis for Malaysia, and interest channel of monetary transmission mechanism only for China.

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Stock Market Responses to Monetary and Fiscal Policies: Case Studing China, India, Indonesia, and Malaysia

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