Αβεβαιότητα οικονομικής πολιτικής και τιμές μετοχών
Economic policy uncertainty and stock prices
This thesis examines the possible effect of domestic money markets’ returns on the Uncer-tain Economic Policy in the respective countries. This Uncertainty is expressed quantitative-ly by the EPU index (Economic Policy Uncertainty), while the Least Squares Regression method has been selected, in order to highlight any conclusions. At the same time, the key macroeconomic indicators that have been used are the Consumer Price Index (CPI) and the Interest rate, to indicate the rate of change of the CPI and the Interest rate differences re-spectively in the forthcoming regressions, in order to have a more complete overall picture of the research, while the Uncertainty Indexes of the rest of the economies have been add-ed as independent variables, with some lag-time. Namely, the Uncertainty in all the economies under consideration is highly negatively corre-lated with the domestic capital market’s stock prices return (as it is reflected by the respec-tive stock market indexes), at that (a) with zero significance values and (b) with correlation coefficients with very high values. China’s economy has proved to be an exception of the above. What makes it more interesting is the fact that the Uncertainty in all the economies under consideration is highly correlated with the Uncertainty of the previous period, which indi-cates that the it is subject to trending behavior. This manifests, among other things, the In-dex’s medium-term nature. What is more, this correlation is positive for all economies. In conclusion, it should be mentioned that the EPU index does not seem to be correlated with the macroeconomic scale of the respective economy in each given case, since none of the CPI and the Interest rate variables have displayed statistic significance in any country under consideration. Europe’s economy has proved to be an exception, in which seems to exist a correlation between the uncertainty and its inflation (negative correlation).