Fisher Effect in stock market means the expected nominal return should equal to the expected real return plus expected inflation rate. From 1970s, the scholars in western country have done lots research on whether Fisher Effect holds in capital market as well as the relation between inflation rate and stock return. The conclusions are identical: Fisher Effect does not hold in stock market, and there is negative correlation between stock return and inflation rate. However, the result is contrary to traditional theories, which induce many economists to pursue the reason underlying. As consequence, various theories and hypothesis have been presented to explain the results, of which the Tax-Effect Hypothesis, Proxy Hypothesis, Reverse Causality Hypothesis and Variability Hypothesis enjoy profoundly influence. In light of these, there is no verdict on this issue by now.Reviewing related studies both domestic and overseas, this... |