The Relationship between Money Supply and Stock Prices

The purpose of the present paper is to contribute further to the literature on stock market - macroeconomic variable linkages for developing economies and, specifically, for the country for Taiwan , Hong Kong, Singapore and Korean. Our results are broadly consistent with the general economic literature on macroeconomic. Our results suggest that exists a long-run equilibrium relationship between macroeconomic policies and stock prices for these four countries, stock prices do not necessarily adjust quickly and fully to the changes in either monetary or fiscal policy in the short run. This paper also represents an important step in addressing the issue of spillover identification between the macroeconomic and the stock market.