The Review of Macroeconomic Factors and Stock Returns

Abstract

This paper aims to review a number of studies on macroeconomic factors and stock returns. All of the macroeconomic variables are classified into four groups: variables reflecting general economic conditions, variables related to interest rate and monetary policy, variables concerning price level, and variables concerning international activities. Furthermore, various studies on macroeconomics factors and stock returns have employed different methodologies based on their purposes and interpretations. Although the results are mixed, most studies have shown evidence that there are significant relationships between macroeconomic variables and stock returns.