Impact of Monthly Returns of S&P 500’s Most Dominant Components on U.S. Inflation Growth
Analyzing the relationship between inflation and stocks markets has always been an important topic of discussion in financial industries. Investors, mutual funds, and researchers, to name a few, use technical methods to predict the effect of inflation on stocks. Since then, researchers have focused their interests on the effect that inflation can have on stock market performance. But until now, the analysis of the opposite effect had not yet been studied. In our paper, we were able to conduct this analysis in which the objective was to find out whether the stock market monthly return had an impact on inflation growth. In this study, we used the most dominant components of the S&P500 index against inflation. This paper aimed to apply the inferential statistical method, namely, the multiple linear regression model to analyze the impact each stock’s logarithm monthly return could have on inflation monthly growth. We used Yahoo Finance’s data from 2013 to 2022. To avoid the multicollinearity problem in our model, we applied the variation inflation factor statistical test. From the regression results, we found that Amazon (AMZN) and JP Morgan (JPM) have both a significant impact on inflation growth with respective P-values of 0.028 and 0.009. For every 1 percent increase in Amazon’s monthly return, the inflation growth value increases by 0.77 percent. For a 1 percent increase in JP Morgan's monthly return, inflation growth increases by 1.09 percent
Year of publication: |
[2023]
|
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Authors: | Tanoe, Ph.D., Vincent |
Publisher: |
[S.l.] : SSRN |
Subject: | USA | United States | Inflation | Wirtschaftswachstum | Economic growth | Schätzung | Estimation |
Saved in:
freely available
Extent: | 1 Online-Ressource (15 p) |
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Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 15, 2023 erstellt |
Other identifiers: | 10.2139/ssrn.4419728 [DOI] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10014357239
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