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Monetary Policy and the Stock Market: Some International evidence

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  • Luis Angeles

Abstract

This paper presents a model where opening the capital account of an economy causes more bankruptcies to take place in the non tradables sector. Non tradable arms must forecast the future state of the economy when investing since the demand for their goods depends on this. In our model the interest rate is a powerful signal that non tradable arms use when the capital account is closed, but its informational content decreases once the capital account opens up and international (as well as domestic) shocks affect it.

Suggested Citation

  • Luis Angeles, "undated". "Monetary Policy and the Stock Market: Some International evidence," Working Papers 2006_13, Business School - Economics, University of Glasgow.
    • Handle: RePEc:gla:glaewp:2006_13
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    File URL: http://www.gla.ac.uk/media/media_219106_en.pdf
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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