This paper examines the extent to which fiscal policy actions affect the stock market's behavior for the US during 1968-2005. The findings are consistent with the hypothesis that past budget deficits negatively affect current stock returns thus suggesting that the market is inefficient with...

This paper examines the dynamic linkages between monetary policy and the stock market during the three distinct monetary regimes of Burns, Volcker and Greenspan since the 1970s. Some major findings are the following. First, in the 1990s it appears that there was a disconnection between Federal...

The paper examines the stochastic behaviour and the volatility patterns of the Greek drachma against the German mark and the US dollar in response to shifts in the monetary stances of Germany and the US. The methodological design is the GARCH specification. The results strongly suggest that...

The paper investigates the issue of whether exchange rate volatility has any significant adverse effects on the trade volume between several European Union countries and Germany over the 1979-1998 period. The measure for exchange rate volatility is obtained from an Exponentially Generalized...

A structural VAR model, with stock prices, real economic activity, a short-term interest rate and inflation, was applied to four European countries to investigate whether economic fundamentals play an important role in their national stock markets. The analysis considers the pre- and post-Euro...

This paper explores the effects of currency substitution behavior in Greece, Portugal and Spain in light of their upcoming participation in the European monetary Union. The cointegration methodology adopted leads to an error-correction model for each country which allows us to separate the...