Journal of
Economics and International Finance

  • Abbreviation: J. Econ. Int. Finance
  • Language: English
  • ISSN: 2006-9812
  • DOI: 10.5897/JEIF
  • Start Year: 2009
  • Published Articles: 348

Full Length Research Paper

Analyzing the effect of macroeconomic variables on stock market returns: Evidence from Ghana

Owusu-Nantwi, Victor2 and John K. M. Kuwornu1*
  2Ghana Institute of Management and Public Administration, P. O. Box AH 50, Achimota, Accra, Ghana. 1Department of Agricultural Economics, P. O. Box LG 68, University of Ghana, Legon, Accra, Ghana.
Email: [email protected], [email protected]

  •  Accepted: 19 September 2011
  •  Published: 31 October 2011



This study investigates the relationship between macroeconomic variables and stock market returns using monthly data that spans from January 1992 to December 2008. Macroeconomic variables used in this study are consumer price index (as a proxy for inflation), crude oil price, exchange rate and 91 day Treasury bill rate (as a proxy for interest rate). The ordinary least square estimation (OLS) model in the context of the Box-Jenkins time series methodology was used in establishing the relationship between macroeconomic variables and stock market returns. Empirical findings reveal that there is a significant relationship between stock market returns and consumer price index (inflation). On the other hand, crude oil prices, exchange rate and Treasury bill rate do not appear to have any significant effect on stock returns. The results may provide some insight to corporate managers, investors and policy makers.


Key words: Stock market returns, inflation, crude oil price, exchange rate, interest rate, Ghana.