U.S. Monetary Policy, Monetary Aggregates and S&P 500 Stock Prices: An Empirical Analysis, 2009-2016

Title

U.S. Monetary Policy, Monetary Aggregates and S&P 500 Stock Prices: An Empirical Analysis, 2009-2016

Authors

Presenter(s)

Alison M Berry

Files

Description

After the 2008 recession, the U.S. Federal Reserve Bank undertook massive quantitative easing in order to shore up the financial markets and facilitate economic growth. In this study I examine the relationship between money supply growth and the expansion of financial markets with a particular focus on S&P 500 stock returns. I test the hypothesis that stock prices covary directly with money supply growth i.e. R=A+B(MS) where R is the stock return, MS is the money supply, and A and B are the equation perimeters. I expect B to be greater than zero. Three measures of the money supply are used in the regression analysis: (1) the adjusted monetary base, (2) M1 money supply, and (3) M2 money supply. The time period 2009-2016 is considered to be a period of aggressive monetary easing.

Publication Date

4-5-2017

Project Designation

Independent Research - Undergraduate

Primary Advisor

Trevor C Collier

Primary Advisor's Department

Economics and Finance

Keywords

Stander Symposium poster

U.S. Monetary Policy, Monetary Aggregates and S&P 500 Stock Prices: An Empirical Analysis, 2009-2016

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