William Bernhard

Democratic Processes and Financial Markets (eBook, PDF)

Pricing Politics

• Format: PDF

Produktbeschreibung

The authors examine the conditions under which democratic events, including elections, cabinet formations, and government dissolutions, affect asset markets. Where these events have less predictable outcomes, market returns are depressed and volatility increases. In contrast, where market actors can forecast the result, returns do not exhibit any unusual behavior. Further, political expectations condition how markets respond to the political process. When news causes market actors to update their political beliefs, market actors reallocate their portfolios, and overall market behavior changes. To measure political information, Professors Bernhard and Leblang employ sophisticated models of the political process. They draw on a variety of models of market behavior, including the efficient markets hypothesis, capital asset pricing model, and arbitrage pricing theory, to trace the impact of political events on currency, stock, and bond markets. The analysis will appeal to academics, graduate students, and advanced undergraduates across political science, economics, and finance.

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Produktdetails

• Verlag: Cambridge University Press
• Erscheinungstermin: 24. Juli 2006
• Englisch
• ISBN-13: 9780511280108
• Artikelnr.: 38197800

Autorenporträt

William Bernhard is Associate Professor of Political Science at the University of Illinois at Urbana-Champaign. His work has appeared in the American Journal of Political Science, the American Political Science Review, International Organization, International Studies Quarterly, the Journal of Politics, and the Quarterly Journal of Political Science.

Inhaltsangabe

1. Introduction
2. Democratic processes and political risk: evidence from foreign exchange markets
3. When markets party: stocks, bonds, and cabinet formations
4. The cross-national financial consequences of political predictability
5. Cabinet dissolutions and interest rate behavior
6. Bargaining and bonds: the process of coalition formation and the market for government debt in Austria and New Zealand
7. Time, shares, and Florida: the 2000 Presidential Election and stock market volatility
8. Polls and pounds: exchange rate behavior and public opinion in Britain
9. Conclusion: political predictability and financial market behavior.