Working Paper
Inflation and Financial Market Performance: What Have We Learned in the Last Ten Years?
The last decade has witnessed a great deal of theoretical and empirical research on the relationships between inflation, financial market performance, and economic growth. This paper provides a survey of that literature and presents new cross-country empirical results on this topic. We find that inflation is negatively associated with banking industry size, real returns on financial assets, and bank profitability. We also discover a positive relationship between asset return volatility and inflation.
Suggested Citation
Boyd, John, and Bruce Champ. 2003. “Inflation and Financial Market Performance: What Have We Learned in the Last Ten Years?” Federal Reserve Bank of Cleveland, Working Paper No. 03-17. https://doi.org/10.26509/frbc-wp-200317
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