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Stock Prices, News, and Business Conditions / Grant McQueen, V. Vance Roley.
- Format:
- Book
- Author/Creator:
- McQueen, Grant.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w3520.
- NBER working paper series no. w3520
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1990.
- Summary:
- Previous research finds that fundamental macroeconomic news has little effect on stock prices. This study shows that after allowing for different stages of the business cycle, a stronger relationship between stock prices and news is evident. In particular, the empirical results suggest that the effect of news about real economic activity depends on the varying responses of expected cash flows relative to equity discount rates. When the economy is strong, for example, the stock market responds negatively to good news about real economic activity, reflecting the larger effect on discount rates relative to expected cash flows.
- Notes:
- Print version record
- November 1990.
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