## Stock Returns and Output Growth in Emerging and Advanced Economies

_IMF Working Papers, May 1, 2000_

## Source details

**Canonical URL:** [Stock Returns and Output Growth in Emerging and Advanced Economies](https://www.imf.org/en/publications/wp/issues/2016/12/30/stock-returns-and-output-growth-in-emerging-and-advanced-economies-3571)

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## Bibliographic details
- Authors: Paolo Mauro
- Published: May 1, 2000
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451851274.001

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### Summary findings
- The paper studies the correlation between output growth and lagged stock returns in a panel of emerging market economies and advanced economies.
- The correlation is as strong in emerging market economies as in advanced economies.
- Asset prices therefore contain valuable information to forecast output also in emerging market economies.
- The strength of the correlation between output growth and lagged stock returns is significantly related to a number of stock market characteristics, including:
  - the number of listed domestic companies and initial public offerings,
  - a high market capitalization to GDP ratio,
  - English legal origin.

### Subjects and keywords
- Subject: Emerging and frontier financial markets; Financial institutions; Financial markets; Market capitalization; Production; Production growth; Stock markets; Stocks
- Keywords: Africa; broad money growth; Emerging and frontier financial markets; emerging markets; emerging markets Factbook; Leading indicators; Market capitalization; narrow money; output growth; Production growth; returns-growth association; stock; stock markets; stock return; Stocks; WP

### Research implications
- Asset prices (lagged stock returns) can serve as leading indicators for output growth forecasting in both emerging and advanced economies.
- Cross-country variation in the predictive strength of stock returns is associated with observable stock market features (listed companies, IPO activity) and structural characteristics (market capitalization to GDP, legal origin).

*Source: IMF Working Paper "Stock Returns and Output Growth in Emerging and Advanced Economies", Paolo Mauro, May 1, 2000.*

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## Content in this bundle

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/stock-returns-and-output-growth-in-emerging-and-advanced-economies-3571_