What are the short-term and long-term effects of stock market volatility on economic growth?
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Stock market volatility plays a significant role in shaping economic growth dynamics. In the short term, stock market volatility can impact economic growth by influencing investment decisions and overall market sentiment. However, in the long term, stock market volatility can have both positive and negative effects on economic growth. Studies suggest that a well-regulated and liquid stock market can positively impact economic development. Additionally, research indicates that the stock market has a positive impact on economic growth in the Indian economy, emphasizing the need for further enhancement of the stock market to achieve higher economic growth. Furthermore, the performance of the stock market in MENA countries has shown a significant positive long-run effect on economic growth, highlighting the importance of policies that improve stock market efficiency to attract more investors and boost economic growth.
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| Papers (5) | Insight |
|---|---|
1 Citations | Short-term stock market volatility may impact economic growth, while long-term positive stock market performance can enhance economic growth in MENA countries, as per the study. |
1 Citations | The study shows a positive impact of the stock market on economic growth in both short- and long-term, indicating that enhancing the stock market can lead to higher economic growth in India. |
| Stock market volatility can negatively impact GDP prospects in both the short and long term, potentially hindering economic growth due to the uncertainty and instability it introduces. | |
| Stock market volatility mediates an asymmetric effect on economic growth and environmental degradation in Nigeria, with a significant impact on both short-term and long-term economic growth dynamics. | |
| Short-term effects show a positive association between stock market and economic growth in volatile environments. Long-term impact suggests relaxing stock market regulations to enhance liquidity and economic development. |
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