An Economic and Analytical Study of Inflation’s Impact on Performance Indicators of the Financial Market: A Case of Amman Stock Exchange for the Period 1980-2015

Abstract

This study aims to measure the impact of inflation rates in Jordan on the financial performance of the market through the use of the following performance indicators: the trading volume index, the index market value, the general index of shares prices, the index of the share turnover rate during the period (1980-2015) based on annual data. The Authors concluded in this study that there is a statistically significant relationship between the inflation rates and the indicators of financial market performance. This is consistent with the economic theory of Fisher and many previous studies, which refers to the positive relationship between inflation and financial market indicators. Thus, it is possible to use the shares to hedge against inflation risks in the Amman Stock Exchange.

Keywords

• Inflation
• Trade Volume Index
• Market Value
• Index of Shares Prices
• Share Turnover Rate