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http://hdl.handle.net/2451/27314
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| Title: | Political News and Stock Prices: The Case of Saddam Hussein Contracts |
| Authors: | Amihud, Yakov
Wohl, Avi |
| Keywords: | political risk
war and the stock market
war and exchange rates |
| Issue Date: | Jul-2003 |
| Series/Report no.: | S-MF-03-06 |
| Abstract: | This paper studies the association between the market’s
expectations of Saddam Hussein’s fall from power, reflected in
"Saddam contract" prices, and stock prices, oil prices and
exchange rates. During the war, a rise in the probability of
Saddam’s fall, which also indicated a speedy end to the war, was
positively and significantly associated with stock prices, strengthened
the dollar against the Euro, and lowered oil prices. Before the war, a
rise in the probability of Saddam’s fall, which may have also
indicated the probability of a costly war breaking out, lowered stock
prices, which adjustment gradually to this information. |
| URI: | http://hdl.handle.net/2451/27314 |
| Appears in Collections: | Macro Finance
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