A Transmission Mechanism Analysis of Inflation’s Affecting Stock Returns

The co-movement and causality between housing and stock markets in the time and frequency domains considering inflation

“…Taxes affect stock selection, and different types of stocks correspond to different investors. High-level taxation investors are willing to hold lower-yield stocks, while low-level tax and tax-exempt investors are willing to hold higher-yield stocks (Xu et al , 2012). Overall, under higher tax conditions, enterprises use less for production and dividends distribution.…”

“…Investors buy less stock; thus a high tax rate has a negative effect on stocks. On the other hand, lower tax rates or tax credits can be applied to increase investment and consumption levels, thus improving economic development (Xu et al , 2012). Unlike bank credit, the national debt is a financial credit adjustment tool; it also has an important effect on the stock market.…”

Stock Market Liquidity and 􀀀/􀀁 LIBOR Rates: A Study for PIGS Countries and Turkey

“…It is widely accepted that stock returns are negatively related to the changes in interest rates. Xu et al (2012) explains why interest rates affect the stock returns negatively: First, as increasing in interest rates make it difficult for the companies to find funds, managers are obliged to decrease the scale of production and the stock returns decline in accordance with the fall in future income. Second, the increase in interest rates raises the discount rate in the stock valuation and the price determined in the valuation of investor drops.…”