RELATIONSHIP BETWEEN STOCK PRICES AND EXCHANGE RATE
That was begun implement the free rate based exchange rate regime with the end of the Bretton Woods system in the 1973, developments in financial markets, reducing controls on foreign capital and the 1997-98 Asian crisis, explores the dynamic relationship between the exchange rate and stock prices i...
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| Auteurs principaux: | , |
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| Format: | article |
| Langue: | DE EN FR TR |
| Publié: |
Fırat University
2019
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| Accès en ligne: | https://doaj.org/article/cfdfe37b3f8b4508af2a7888296c499f |
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| Résumé: | That was begun implement the free rate based exchange rate regime with the end of the Bretton Woods system in the 1973, developments in financial markets, reducing controls on foreign capital and the 1997-98 Asian crisis, explores the dynamic relationship between the exchange rate and stock prices in the theoretical and the number of practical work and markedly increases its significance. Constitute the very sensitive aspect of the financial markets and hence affected quite quickly from internal and external developments is generally agreed that these two market types that have an important place in economic development. The reactions that occur in both markets is very important to see the results of policies. The relationship between the exchange rate and capital markets, for investors, it is important in determining the future value of this market. In particular, is the main indicator of market interest is often referred to with two expressions of the economic crisis. Considering the work done so far for stocks and exchange relations between "traditional" and "portfolio balance" approach seems to be of two basic approaches. This article attempts to examine whether stock market and foreign exchange market are related to each other. In the analyses, Johansen co integration method and error correction mechanism are used on the montly data for the period 2006:1 to 2015:4. The major findings of the study are (1) exchange rate and stock price are integrated same order and co-integrated, (2) there is a strong causility from Exchange to stock price, (3) on the other hand, there is no causility from stock price to exchange rate. |
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