Macroeconomic Indicators and Their Impact on Stock Market Performance in the Short and Long Run: The Case of the Baltic States
Macroeconomic Indicators and Their Impact on Stock Market Performance in the Short and Long Run: The Case of the Baltic States

Summary/Abstract: The relation between macroeconomic variables and the movement of stock prices has well been documented in the literature over the last several decades. It is often argued that stock prices are determined by some fundamental macroeconomic variables. Therefore, macroeconomic variables can influence investment decisions and motivates many researchers to investigate the relation between stock market prices and macroeconomic variables. The current paper attempts to introduce the concepts of stock market and macroeconomic indicators, then to present a model of the impact of macroeconomic indicators on stock market index, and to define what macroeconomic indicators are related with stock market index in the short and long runs. The study investigates ten macroeconomic indicators and the main Baltic stock market indices. The data are monthly and extend from the January of 2000 to the December of 2008. Empirical research has been conducted with the Baltic States: Lithuania, Latvia, and Estonia. With the reference to the results of performed analysis the interpretations of the relationships between macroeconomic indicators and stock market index from the viewpoint of investors have been formed.

• Details
• Contents