Munich Personal RePEc Archive

Stocks as Hedge against Inflation in Pakistan: Evidence from ARDL Approach

Shahbaz, Muhammad and Islam, Faridul (2010): Stocks as Hedge against Inflation in Pakistan: Evidence from ARDL Approach.

[img]
Preview
PDF
MPRA_paper_30970.pdf

Download (153Kb) | Preview

Abstract

The paper implements ARDL bounds testing approach to cointegration to explore whether or not stocks are good hedge against inflation in the case of a transition economy such as Pakistan, using annual data for the period 1971 – 2008. Ng-Peron (2001) unit root test is applied to determine the stationarity of the series. The results suggest that stocks act as good hedge against inflation in Pakistan both in the long and the short run. The findings should help formulate appropriate policy to encourage investment in financial markets and thereby promote economic growth.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.