Is it true that changes in stock prices are predominantly set by changes in money supply? At some level, it makes sense that an increase in the rate of growth of money supply strengthens the rate of increase in stock prices. Conversely, a fall in the rate of growth of money supply should slow down the growth momentum of stock prices. Austrians have generally accepted this causal connection, though for different reasons than others, as I will explain below. But first we must deal with the errors of the Post-Keynesians. FULL ARTICLE
Money and the Stock Market: What is the Relation?
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