Monetary Policy and the Stock Market: Empirical Evidence from the UK - Dissertation Example

The research study is of high significance and importance owing to the crucial nature of the topic being investigated. The policy makers and economists are in search of different ways and methods for promoting economic growth and avoiding any financial and economic crisis. Especially after the recent economic downturn, the economists and policy makers all over the world are under serious pressure to come up with effective theory and policy for economic and financial development. One important factor which is considered to be responsible for the recent financial crisis is the monetary policy and management of supply of money in the economy.

Hence, it can be said that monetary policy has direct relationship with the economic development. This research study will facilitate the economist and policy makers, not only in United Kingdom but all over the world, in the process of devising and formulating effective monetary policy and control the supply of  money in the economy in efficient manner. The economists and other policy makers will be able to comprehend the relationship between monetary policy and  important economic indicators like inflation, economic development, GDP, and stock returns.1.3.

 Motivation of the Research Study:The rationale or motivation behind the research study is to get a better idea and understanding of the relationship between the monetary policy and stock market. The importance of this topic has further increased after the recent economic and financial crisis.. Especially after the recent economic downturn, the economists and policy makers all over the world are under serious pressure to come up with effective theory and policy for economic and financial development.

One important factor which is considered to be responsible for the recent financial crisis is the monetary policy and management of supply of money in the economy. Hence, it can be said that monetary policy has direct relationship with the economic development. This research study will facilitate the economist and policy makers, not only in United Kingdom but all over the world, in the process of devising and formulating effective monetary policy and control the supply of money in the economy in efficient manner.

The economists and other policy makers will be able to comprehend the relationship between monetary policy and important economic indicators like inflation, economic development, GDP, and stock returns. 1.3. Motivation of the Research Study: The rationale or motivation behind the research study is to get a better idea and understanding of the relationship between the monetary policy and stock market. The importance of this topic has further increased after the recent economic and financial crisis.

The economists and policy makers are trying to come up with effective and efficient monetary policy in order to avoid any other financial and economic crisis. In order to come up with effective monetary policy it is important to understand the relationship of monetary policy with other important economic indicators. The interest rate is directly dependent on different economic factors like inflation, GDP, economic growth etc. Hence, the researcher has tried to analyse the