Theory predicts that the equilibrium real interest rate, r*t, and the perceived trend in inflation, ð*t, are key determinants of the term structure of interest rates. However, term structure analyses generally assume that these endpoints are constant. Instead, we show that allowing for time...

We shed new light on the negative relationship between real stock returns or real interest rates and (i) ex post inflation, (ii) expected inflation, (iii) unexpected inflation and (iv) changes in expected inflation. Using the structural vector autoregression methodology, we propose a...

Markov chain models are commonly used in stock market analysis, manpower planning, and in many other areas because of its efficiency in predicting long run behaviour. This study proposes a simple predicting tool to forecast the future behaviour of stock prices. The study analyses the stock price...