1 option
Risk, Inflation, and the Stock Market / Robert S. Pindyck.
- Format:
- Book
- Author/Creator:
- Pindyck, Robert S.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w1186.
- NBER working paper series no. w1186
- Language:
- English
- Subjects (All):
- Inflation (Finance).
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1983.
- Cambridge, Massachussetts : National Bureau of Economic Research, 1983.
- Summary:
- Most explanations for the decline in share values over the past two decades have focused on the concurrent increase in inflation.This paper considers an alternative explanation: a substantial increase in the riskiness of capital investments. We show that the variance of firms' real gross marginal return on capital has increased significantly, increasing the relative riskiness of investors' returns on equity, and that this can explain a large part of the market decline. We also assess the effects of increase in the mean and variance of the inflation rate, and a decline in firms' expected return on capital.
- Notes:
- Print version record
- August 1983.
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