| OCR Text |
Show 109 the rate in the bond market inflation expectations, effect, the or interest. to Here before when an growth affected by three of and in money. change explained 94 percent is of economy, Using the variance important point discussing his in Palmer's the liquidity equations, long-term made and was factors: article, rates 1 a of alluded was that Keran percent acceleration in the real money stock will decrease interest rates in by six basis points, the real will growth rate of and for every the economy, 15 basis points. prices, interest rates will increase increase effect of money changes, is on stock significant For 1 1 percent increase the percent increase in 100 basis not nearly as much The points. prices, through interest but rates ineret as rate its com bined, indirect effect with expectations. This the result conclusion of Karan's that the expected earnings considering tion, it and expectations at in relation the money inflation. it as to the stock, changes expected earnings. an of is, stock is The role indirect; Using these in GNP, and price formula should be considered with other variables, changes in and it around price of stocks is influenced mainly by played by inflation, significant in article centers namely, price changes variables, Keran arrived equation that explained 98 percent of stock price variance. Concerning cent increase the in money role of money, supply led to he a found that a 1 per- 1.31 point change in |
