Open AccessThe Reasons for the Growth of the US Stock Market
Author(s) -
Illia Morhachov,
Olga Chorna,
Olshanskyi Oleksandr,
Andrii Martynov,
Ievgen Ovcharenko,
Олена Хандій,
Yevhen Іvchenko
Publication year - 2022
Publication title -
european journal of sustainable development
Language(s) - English
Resource type - Journals
eISSN - 2239-6101
pISSN - 2239-5938
DOI - 10.14207/ejsd.2022.v11n1p124
Subject(s) - stock market , money supply , economics , gross domestic product , stock (firearms) , stock market index , economic indicator , monetary economics , interest rate , financial economics , econometrics , macroeconomics , mechanical engineering , paleontology , biology , engineering , horse
Sustained economic growth as well as the reasons for this growth are fundamental and important issues in economic theory. The article considers the hypothesis regarding the influence of these two factors on the growth of the United States stock market: the country's gross domestic product as well as the money supply in various aggregators. The purpose of the work is to determine the reasons for the growth of the United States stock market. The following methods were used to determine the influence of the gross domestic product and the money supply on the corresponding stock market, namely, the correlation-regression and graphical analysis as well as the comparison of average annual growth rates. It has been discovered that in order to objectively find out the causal relationship between the factors, it is important to use such methods through the integrated approach. As a result, it has been observed that the fluctuations in the gross domestic product of the USA do not significantly affect those in the stock market of the country. On the contrary, the economic and mathematical models of the S & P-500 stock index and the money supply are similar. The corresponding similarity allowed the authors to substantiate the existence of a significant impact of the change in the money supply on the dynamics of its stock market. In turn, the reason for the growth of this index is a significant reduction in the key rate, which results in cheaper prices for credits.