Can Stocks Hedge against Inflation in the Long Run? Evidence from Ghana Stock Market

Abstract

Based on Fisher (1930) hypothesis, we test whether Ghana stock market can provide hedge against inflation in the long run using cointegration analysis. Using data for the Databank stock Index (DSI) from January 1991 to December 2007, the results give strong support for the hedge property. Thus Ghana stock market provides full hedge against inflation. The outcome of this study holds important lesson for the market participants in developing market (many of which have experienced decades of higher inflation) that current inflation may not necessarily be associated with expectations of lower future returns. [ABSTRACT FROM AUTHOR] Copyright of International Journal of Business & Management is the property of Canadian Center of Science & Education and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)