Impact of Fiscal and Monetary Policy Interactions on Stock Market: Evidence from Pakistan
Abstract
This study highlights the interaction among fiscal and monetary policy and its impact on stock market of Pakistan. This study found that there is minimum degree of coordination i.e., 34% between fiscal and monetary policy. This study practices structural vector autoregressive (SVAR) model on macroeconomic variables and stock prices over the time period of 1998Q1 to 2017Q2. The empirical results conclude that policy variables are having positive and highly significant impression on stock prices. These results are consistent with the fiscal exclusion model. The study recommends the improvement of interaction among macroeconomic institutions and their impact on stock market to boost up economy of Pakistan.
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Copyright (c) 2021 Hafsa Hina, Komal Abbasi
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