This study examines the impact of inflation and monetary policy shocks on stock market performance in Zimbabwe from 2000 to 2022. The study analyzes the relationship between different variables' regression using data obtained from the Zimbabwe Stock Exchange (ZSE) returns, inflation rates obtained from the Zimbabwe National Statistics Agency (ZIMSTAT), and interest rates obtained from the Reserve Bank of Zimbabwe. In this regression, ZSE returns are the dependent variable while inflation and interest rates are the independent variables. The research findings suggest that inflation has a negative impact, while monetary policy shocks have a positive impact on stock market performance in Zimbabwe.
The study finds that inflation has a significant and persistent negative effect on stock market returns, with a one standard deviation shock in inflation leading to a significant decline in stock market returns. Moreover, the study identifies that monetary policy shocks, such as changes in interest rates, have a significant impact on stock market returns, but the effect is less pronounced compared to inflation in Zimbabwe. Furthermore, the study examines the transmission channels through which monetary policy shocks affect the stock market in Zimbabwe. The results suggest that changes in interest rates affect the stock market mainly through their impact on inflation expectations and exchange rates. This highlights the importance of considering both monetary and macroeconomic factors when analyzing the impact of monetary policy on the stock market in Zimbabwe. The study concludes that high inflation rates and frequent monetary policy interventions have a detrimental effect on stock market performance in Zimbabwe.
The findings of this research are relevant to investors, policymakers, and analysts who are interested in understanding the relationship between inflation, monetary policy, and stock market performance in Zimbabwe. The study also analyzed the impact of GDP and exchange rate as control variables on stock market performance. The results suggested that changes in exchange rates have a negative impact on stock market returns GDP have a negative impact. The joint impact of inflation and monetary policy shocks was also found to be significant, indicating that both variables affect stock returns.
Table of Contents
- CHAPTER I: INTRODUCTION
- 1.0 Introduction
- 1.1 Background to the study.
- 1.1.1 Stock Market Performance in Zimbabwe
- 1.2 Problem Statement
- 1.3 Research Objectives
- 1.4 Research Questions
- 1.5 Significance of the Study
- 1.5.1 To the Researcher
- 1.5.2 To the University
- 1.5.3 To Policy Makers and investors
- 1.6 Scope of the Study
- 1.7 Assumptions of the Study
- 1.8 Limitations of the Study
- 1.9 Organisation of the study
- CHAPTER II: LITERATURE REVIEW
- 2.0 Introduction
- 2.1 Definition of terms
- 2.1.1 Stock market
Objectives and Key Themes
This research project investigates the impact of inflation and monetary policy shocks on stock market performance in Zimbabwe between 2000 and 2022. The study aims to analyze the relationship between inflation, interest rates, and stock market returns, considering macroeconomic factors like GDP and exchange rates.
- Impact of inflation on Zimbabwean stock market performance.
- Effect of monetary policy shocks (interest rate changes) on Zimbabwean stock market returns.
- Transmission mechanisms of monetary policy shocks within the Zimbabwean stock market.
- Influence of macroeconomic factors (GDP and exchange rates) on stock market performance.
- Joint impact of inflation and monetary policy shocks on stock market returns.
Chapter Summaries
CHAPTER I: INTRODUCTION: This chapter sets the stage for the research by providing background information on stock market performance in Zimbabwe. It clearly defines the research problem, outlining the gap in existing knowledge that the study seeks to address. The chapter then articulates the specific research objectives and questions that guide the investigation. It also details the significance of the study for researchers, the university, policymakers, and investors, highlighting the potential impact of the findings. The scope, assumptions, and limitations of the study are carefully considered and explained, setting realistic boundaries for the research. Finally, the chapter outlines the organization of the subsequent chapters, providing a roadmap for the reader.
CHAPTER II: LITERATURE REVIEW: This chapter provides a comprehensive review of existing literature relevant to the research topic. It begins by defining key terms, such as "stock market," ensuring clarity and a common understanding throughout the study. The review then synthesizes previous research findings on the relationship between inflation, monetary policy, and stock market performance, both globally and specifically within the context of Zimbabwe's economic landscape. This literature review critically evaluates existing theoretical frameworks and empirical evidence, identifying gaps in the research and positioning the current study's contribution to the field. It establishes a strong foundation upon which the subsequent empirical analysis will build, laying out the theoretical underpinnings of the research.
Keywords
Inflation, monetary policy, stock market performance, Zimbabwe, interest rates, exchange rates, GDP, regression analysis, macroeconomic factors, stock market returns.
Frequently Asked Questions: Comprehensive Language Preview
What is the overall subject of this research?
This research project investigates the impact of inflation and monetary policy shocks on stock market performance in Zimbabwe between 2000 and 2022. It analyzes the relationship between inflation, interest rates, and stock market returns, considering macroeconomic factors like GDP and exchange rates.
What are the key themes explored in this research?
The key themes include the impact of inflation on the Zimbabwean stock market, the effect of monetary policy shocks (interest rate changes) on stock market returns, the transmission mechanisms of monetary policy within the Zimbabwean stock market, the influence of macroeconomic factors (GDP and exchange rates), and the combined impact of inflation and monetary policy shocks on stock market returns.
What does the Table of Contents reveal about the structure of the research?
The research is structured into at least two chapters. Chapter I, the introduction, covers background information on Zimbabwe's stock market performance, the research problem, objectives, questions, significance, scope, assumptions, limitations, and organization of the study. Chapter II, the literature review, defines key terms like "stock market" and reviews existing literature on the relationship between inflation, monetary policy, and stock market performance, both globally and in Zimbabwe.
What is the purpose of Chapter I: Introduction?
Chapter I sets the context for the research, defines the problem, states the objectives and research questions, explains the significance of the study for various stakeholders, and outlines the scope, assumptions, limitations, and overall structure of the research.
What is the purpose of Chapter II: Literature Review?
Chapter II provides a comprehensive review of existing literature relevant to the research topic. It defines key terms and synthesizes previous research findings on the relationship between inflation, monetary policy, and stock market performance, both globally and specifically within Zimbabwe's economic context. It identifies gaps in existing research and positions the current study's contribution.
What are the key words associated with this research?
Key words include: Inflation, monetary policy, stock market performance, Zimbabwe, interest rates, exchange rates, GDP, regression analysis, macroeconomic factors, stock market returns.
What is the time period covered by this research?
The research covers the period between 2000 and 2022.
What are the intended audiences for this research?
The research is significant for researchers, the university, policymakers, and investors.
What methods are likely employed in this research (inferred)?
Given the keywords, regression analysis is likely a key method used to analyze the relationships between the variables.
- Citar trabajo
- Mkhululi Ncube (Autor), 2023, The Impact of Inflation and Monetary Policy Shocks on Stock Market Performance in Zimbabwe, Múnich, GRIN Verlag, https://www.grin.com/document/1473009
