Objectives of the study: This study aims to analyze and evaluate the impact of monetary policy two tools: money supply, interest rate changes on Vietnam''''s stock market in the period of t
FOREIGN TRADE UNIVERSITY HCMC CAMPUS FACULTY OF INTERNATIONAL ECONOMICS - - MIDTERM PROJECT THE IMPACT OF MONETARY POLICY ON VIETNAMESE STOCK MARKET Module : Econometrics Teacher : Ms Le Hang My Hanh Class : K59CLC3 Ho Chi Minh, April 2022 LIST OF TEAM MEMBERS No Names Student ID % Contribution Nguyễn Nhất An 2011115008 100% Phạm Thanh Hải 2011156062 80% Trần Nguyên Đông Dương 2011115114 100% Trịnh Bảo Giang 2011155134 100% Võ Thu Hà 2011155142 100% Lê Yên Giang 2011155129 100% TABLE OF CONTENTS LIST OF ABBREVIATIONS LIST OF TABLES LIST OF FIGURES ABSTRACT .1 CHAPTER 1: INTRODUCTION 1.1 Introduction 1.2 Objectives of the study 1.3 Subjects and scope of the study 1.3.1 Research subjects .3 1.3.2 Research scope 1.4 Research Methods 1.5 The layout of the topic CHAPTER 2: THEORETICAL FOUNDATIONS AND EXPERIMENTAL STUDIES 2.1 Theoretical Foundations 2.1.1 Monetary Policy 2.1.2 Stock price index .4 2.1.3 Monetary instruments used by the state to change stock price indexes 2.2 Experimental studies .8 CHAPTER 3: ECONOMETRIC METHODOLOGY 11 3.1 Specifications of the variables 11 3.2 Specification of the econometric model 13 3.3 Data collection and processing methods .14 3.3.1 Data collection methods 14 3.3.2 Data processing methods .14 CHAPTER 4: TEST RESULTS AND DISCUSSION 16 4.1 Test results 16 4.1.1 Testing the overall significance level of model: 16 4.1.2 Testing the significance level of each independent variable: .17 4.1.3 Testing multicollinearity 17 4.1.4 Testing heteroscedasticity 19 4.1.5 The “goodness - of - fit” model 20 4.1.6 Estimating coefficient of variables 20 4.2 Discussions 21 CHAPTER 5: CONCLUSION AND POLICY RECOMMENDATIONS 24 5.1 Conclusion 24 5.2 Policy recommendations 25 5.3 Limitations of the research 25 REFERENCES 26 APPENDIX 32 LIST OF ABBREVIATIONS Abbreviation Explanation STO Stock price CPI Consumer price index EXC Exchange rate IR Interest rate M2 Money supply LIST OF TABLES Table Page Table 3.1 Specifications of the variables & testing hypotheses 11 Table 3.2 Specifications of the variables 12 Table 4.1: Results from regressing model (Appendix 1) 14 Table 4.2: The correlation coefficient among explanatory variables using 16 Stata 15 (Appendix 2) Table 4.3: Results of testing multicollinearity using Vif model in Stata 15 16 (Appendix 3) Table 4.4: Results of the heteroskedasticity by using the White test on Stata 15 18 Document continues below Discover more from:tế lượng kinh kte309 Trường Đại học… 816 documents Go to course 17 Tổng hợp đề CK KTL đáp án - đề thi tổng… kinh tế lượng 100% (8) ĐỀ Kinh Te Luong TEST1 kinh tế lượng 100% (6) Ý NGHĨA BẢNG HỒI 18 QUY MƠ HÌNH BẰN… kinh tế lượng 100% (5) Tiểu luận Kinh tế 30 lượng - nhóm 11-đã… kinh tế lượng 100% (5) Tiểu-luận -Đạo25 đức-kinh-doanh-… kinh tế lượng 100% (4) ĐỀ ÔN THI KINH TẾ LIST OF FIGURES Figures Figure 3.1 Suggested research model 42 LƯỢNG CUỐI KÌ kinh tế lượng Page 100% 13 (4) ABSTRACT Monetary policy is among the most powerful financial instruments of the Government regarding exerting impact on the economy Stock market, on the other hand, proves very volatile and susceptible to market shocks Our research, therefore, aims to examine the impact of monetary policies and market shocks on the stock market, with the main subject matters being VNIndex as the dependent variable and money supply, customer price index (CPI) representing inflation, exchange rate, and interest rate as independent variables The scope of research is from 2016 to 2021 and the samples are taken in Vietnam and the model in use is the Ordinary Least Square regression model CHAPTER 1: INTRODUCTION 1.1 Introduction: The stock market refers to public marketplaces for the issuance, purchase, and sale of stocks that trade on a stock exchange or over-the-counter Stocks, also known as equities, reflect a company's fractional ownership, and the stock market is a marketplace where investors may purchase and sell ownership of such investable assets A well-functioning stock market is considered vital to economic development because it allows enterprises to swiftly acquire funds from the general public The stock market serves two functions: the first is to provide cash for firms to fund and develop their operations, and the second is to provide investors with the chance to partake in the earnings of publicly listed companies However, there are studies that show the stock market is affected by monetary policy Monetary policy is an economic policy that governs the quantity and pace of expansion of an economy's money supply It is an effective instrument for controlling macroeconomic factors such as inflation and unemployment These policies are achieved through many mechanisms, including as interest rate adjustments, the purchase or sale of government assets, and changes in the quantity of cash circulating in the economy These policies are developed by the central bank or a comparable regulatory entity The relationship between monetary policy and the stock market has attracted more and more attention from investors, researchers and policy-making agencies Understanding the impact of monetary policy on the stock market is critical for policymakers to make right decisions and for investors to determine whether or not to invest In this research, we will largely focus on the effect of monetary policy on the stock market in the Vietnamese market from 2016 to 2021 in order to acquire a more comprehensive picture of our sector The research will investigate the impact of monetary policy on the stock market using two variables: interest rates and money supply There are two more external issues to consider: inflation and exchange rate