The Effect Of Stock Prices On Interest Rate And Economic Growth
Abstract
Equity markets are the markets most interested by investors who demand and supply funds in capital markets. The fact that stocks are under the influence of many risk factors has led to the necessity of investors to monitor these factors carefully when investing in these markets. In this study, the effects of changes in interest rates, which are the most important risk factors on stocks, on economic growth were examined. The stock market and interest rate are two important factors of economic growth in a country. Investors and policy makers are looking at the impact of interest rate on the stock market; monitor monetary policy, risk management practices, financial asset valuation and government practices. The interest rate, which is directly related to economic growth, can be defined as the fee paid for the money used over a period of time. For the borrower, the interest rate is the cost of the borrowed money. From the lender's point of view, the lender is the fee for the money lent. The aim of this study is to investigate the relationship between stock prices and macroeconomic variables. It may not be enough to explain the stock prices with the factors formed according to economic and market conditions. With the effect of psychological behavior, stock prices can fluctuate enormously even though there is no change in market conditions.
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References
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