How is economic growth correlated to index growth?

Authors

  • Aryan Chordia Neerja Modi School
  • Karan Gurbani Mentor, Brock University

DOI:

https://doi.org/10.47611/jsrhs.v10i3.1775

Keywords:

Economic growth, index growth, Pearson product-moment correlation coefficient, theoretical world versus real-world situation, consumer sentiments, consumer confidence

Abstract

This study will mainly focus on the relation between GDP growth and stock market index growth through various methods like the Pearson product-moment coefficient correlation, comparing the theoretical world to the real-world situation, and finally by looking at consumer sentiments and confidence. This could help various analysts, economists, and even the general public. Through the course of our study, we find out various trends in this study, at some point, the results were contradicting themselves but then our last test made it all clear, which proves that there is no correlation between GDP growth and stock market index growth, but then both of them drives from consumer confidence and consumers future actions. 

Downloads

Download data is not yet available.

Author Biography

Aryan Chordia, Neerja Modi School

High School Student

References or Bibliography

Advisorperspectives.com. (n.d.). Retrieved May 06, 2021, from https://www.advisorperspectives.com/dshort/updates/2021/05/05/market-cap-to-gdp-an-updated-look-at-the-buffett-valuation-indicator

Bernstein, W. J., & Arnott, R. D. (2003). Earnings growth: The two percent dilution. Financial Analysts Journal, 59(5), 47-55. doi:10.2469/faj.v59.n5.2563

Buffett indicator: Where are we with Market Valuations? (n.d.). Retrieved May 06, 2021, from https://www.gurufocus.com/stock-market-valuations.php

Extrapolating growth. (2019, November 24). Retrieved May 06, 2021, from https://www.hussmanfunds.com/comment/mc180725/

Finance & development. (n.d.). Retrieved May 06, 2021, from https://www.imf.org/external/pubs/ft/fandd/basics/gdp.htm

Gdp and its relationship with broader markets. (n.d.). Retrieved May 06, 2021, from https://www.utimf.com/articles/gdp-and-its-relationship-with-broader-markets

Government of Canada, S. (2021, May 05). Statistics Canada: Canada's national statistical agency. Retrieved May 06, 2021, from https://www.statcan.gc.ca/eng/start

Halan, E. (2011, February 15). The link between gdp growth and the broad market index. Retrieved May 06, 2021, from https://www.livemint.com/Opinion/uWbDau6oQY50ziaJq0KqIP/The-link-between-GDP-growth-and-the-broad-market-index.html

Hall, M. (2020, September 16). How the stock market affects gdp. Retrieved May 06, 2021, from https://www.investopedia.com/ask/answers/033015/how-does-stock-market-affect-gross-domestic-product-gdp.asp

Is there a correlation between gdp growth and stock market returns? (2021, February 02). Retrieved May 06, 2021, from https://wise-owl.com/is-there-a-correlation-between-gdp-growth-and-stock-market-returns/

Is There a Link Between GDP Growth and Equity Returns? [Advertisement]. (2010, May). Retrieved May 7, 2021, from https://www.msci.com/documents/10199/a134c5d5-dca0-420d-875d-06adb948f578

Jetley, G., Watson, C., & Breno, N. (2014). Revisiting the SUPPLY-SIDE equity risk premium [Abstract]. SSRN Electronic Journal. doi:10.2139/ssrn.2405105

The link between gdp growth and the real estate market. (n.d.). Retrieved May 06, 2021, from https://www.asiagreen.com/en/news-insights/the-link-between-gdp-growth-and-the-real-estate-market

Mee, K. (2017, September). GDP and earnings growth in emerging markets – a loose connection [PDF]. Schroders.

Pettinger, T., Demis, Gwc, Verma, R., G., Pascal, . . . Pathak, R. (2020, March 09). How does the stock market affect the economy? Retrieved May 06, 2021, from https://www.economicshelp.org/blog/221/stock-market/how-does-the-stock-market-effect-the-economy-2/

Published by Statista Research Department, & 22, M. (2021, March 22). U.S. GDP 1990-2019. Retrieved May 06, 2021, from https://www.statista.com/statistics/188105/annual-gdp-of-the-united-states-since-1990/

Shao, Y., Zhang, C., Zhou, J., Gu, T., & Yuan, Y. (2019). How does Culture Shape CREATIVITY? A mini-review. Frontiers in Psychology, 10. doi:10.3389/fpsyg.2019.01219

Stock prices are a better tool to predict gdp trends, not vice-versa'. (2017, October 17). Retrieved May 06, 2021, from https://economictimes.indiatimes.com/markets/stocks/news/stock-prices-are-a-better-tool-to-predict-gdp-trends-not-vice-versa/articleshow/71624242.cms

Three delusions: Paper wealth, a booming economy, and Bitcoin. (2019, November 24). Retrieved May 06, 2021, from https://www.hussmanfunds.com/comment/mmc171218/

Published

11-02-2021

How to Cite

Chordia, A., & Gurbani, K. . (2021). How is economic growth correlated to index growth? . Journal of Student Research, 10(3). https://doi.org/10.47611/jsrhs.v10i3.1775

Issue

Section

HS Research Articles