The Effect of Monetary and Fiscal Policy on Bond Mutual Funds and Stock Market: An International Comparison

This study examines the relationship between bond fund flows, stock market returns and financial policies in developed and developing economies. The findings suggest a bidirectional (negative) relationship between bond flows and market returns in the presence of fiscal and monetary policy for develo...

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Bibliographic Details
Published inEmerging markets finance & trade Vol. 55; no. 13; pp. 3112 - 3130
Main Authors Qureshi, Fiza, Khan, Habib Hussain, Rehman, Ijaz ur, Qureshi, Saba, Ghafoor, Abdul
Format Journal Article
LanguageEnglish
Published Abingdon Routledge 21.10.2019
Taylor & Francis Ltd
Subjects
Bonds
Developed countries
Developing countries
Economic activity
Fiscal policy
LDCs
Monetary policy
mutual fund flows
Securities markets
Stock exchanges
stock market returns
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Summary:This study examines the relationship between bond fund flows, stock market returns and financial policies in developed and developing economies. The findings suggest a bidirectional (negative) relationship between bond flows and market returns in the presence of fiscal and monetary policy for developed countries. However, in the case of developing countries, bond flows follow the previous performance of market returns. Moreover, an expansionary monetary stance has a negative impact on bond flows while an expansionary fiscal policy exerts a positive influence on them. In addition, bond funds flourish in times of low economic activity in both developed and developing countries.
ISSN:1540-496X
1558-0938
DOI:10.1080/1540496X.2018.1535432