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- Title
The Adjustment of Stock Prices to Information About Inflation.
- Authors
SCHWERT, G. WILLIAM
- Abstract
This paper analyzes the reaction of stock prices to the new information about inflation. Based on daily returns to the Standard and Poor's composite portfolio from 1953–78, it seems that the stock market reacts negatively to the announcement of unexpected inflation in the Consumer Price Index (C.P.I.), although the magnitude of the reaction is small It is interesting to note that the stock market seems to react at the time of announcement of the C.P.I., approximately one month after the price data are collected by the Bureau of Labor Statistics.
- Subjects
UNITED States; STOCK prices; CONSUMER price indexes; PRICE inflation; EFFECT of inflation on investments; STOCK price indexes; CONSUMER confidence; UNITED States. Bureau of Labor Statistics; FINANCIAL market reaction; RATE of return on stocks; COST of living
- Publication
Journal of Finance (Wiley-Blackwell), 1981, Vol 36, Issue 1, p15
- ISSN
0022-1082
- Publication type
Article
- DOI
10.1111/j.1540-6261.1981.tb03531.x