Macroeconomics forex trading dubai
Plot macroeconomics forex trading dubai cumulative sum of squares of recursive residuals in China. According to Opdyke [ 19 ], the international investors sought a safe haven macroeconomics forex trading dubai as gold during the global recession in the history. Stock market investors will have to decide whether the value of their shares is driven primarily by the rational estimation of future corporate earnings or macroeconomic fundamentals or whether speculative manias drive the value of their investments. The study investigates the nature of the causal relationships between stock prices and the key macro economic variables in BRIC countries. Traditionally equities have been regarded as a good hedge against inflation because of the fact that equities are claimed against physical assets whose real returns should remain unaffected by inflation.
The magnitude of the coefficient of the ECM term suggests that adjustment process is highly significant for India and quite moderate for Brazil. However, note that in these two cases also, all the three tests fail macroeconomics forex trading dubai for example, both the ADF and PP tests without intercept and constant; and the KPSS test macroeconomics forex trading dubai intercept. Thus, about 84 percent of disequilibrium of the previous month shock is adjusted back to equilibrium in the current month for India and about 9 percent for Brazil. The results on variables at level are given in Table 1which on the whole shows that the variables under study may be considered integrated of order one, i. All the above considerations motivated to conduct this research study in the Indian context.
Moreover, during the global financial instability gold may pull the interest of investors, because there will be a little chance of getting better returns in macroeconomics forex trading dubai stock investments due to fragile economic and financial positions in the global economy. The results show that the ECM term, has negative sign and is statistically significant at 5 percent level, ensuring that long-run equilibrium can be attained in the case of India and Brazil only. Investigation of a cointegration relationship using the ARDL approach does not necessitate testing for a unit macroeconomics forex trading dubai.
These results reveal that identification of direction of relationship between the macroeconomic variables and stock market behaviour facilitates the investors in taking effective investment macroeconomics forex trading dubai as by estimating the expected trends in the macro economic variables and can allocate their resources more efficiently. In the macroeconomics forex trading dubai study, the auto regressive distributed lag ARDL approach to cointegration, developed by Pesaran et al. As we mentioned earlier, due to data constraints we had to drop some important variables For Example: This was also supported by Taleb [ 6 ] and Akerlof [ 4 ] and Shiller studies [ 7 ].
We further probe into the long run and the short run dynamics. However, that the serial correlation tests are only marginally significant not significant at 10 percent level except for India. These results reveal that identification of direction of relationship between the macroeconomic variables and stock market behaviour facilitates the investors in taking effective investment decisions as by estimating the expected trends in the macro economic variables and can allocate their resources more efficiently.