Public defence: Asif M. Ruman

Thursday, December 10, 2020

The doctoral dissertation of M.Sc. Asif M. Ruman (financial economics) titled as Dividends, Fed’s total assets, outside money and stock market performance will be publicly examined at the Oulu Business School on Thursday, December 10, 2020 at 12:00 (noon) in hall TA105. The even can be followed online at

Opponent: Professor Mika Vaihekoski (University of Turku)
Custos: Professor Petri Sahlström (Oulu Business School) 

Dissertation on Jultika

Dividends, Fed’s total assets, outside money and stock market performance.

The literature shows that stock market performance can be predicted using financial ratios such as dividend yield and macroeconomic variables such as money supply and monetary policy tools. After the 2008 financial crisis, policymakers relied upon assets purchase programs because of near-zero interest rates, known as quantitative easing. The resemblance between a central bank’s balance sheet size and outside money supply resurrects an age-old question: how does money supply affect stock market performance?

This thesis comprises three essays and uses the asset-pricing framework to analyze stock market performance. The first essay highlights the role of high autocorrelation of dividend yield in predicting stock market return using dividend yield and payout yield.

This essay shows that dividend yield does not predict price-series return that is the main component of market return. Essays II and III analyze stock market performance using two different proxies for the financial demand for outside money supply. Specifically, essay II investigates the Fed’s balance sheet size in the wake of unconventional monetary policy. Similarly, essay III discusses the similarities between the Fed’s balance sheet size and the monetary base in addition to discussing the characteristics of different types of money supply.

Collectively, essays II and III show that outside money supply (measured by the Fed’s balance sheet size and the monetary base) compared to asset market wealth predicts stock market performance. These findings suggest that policymakers should strive to avoid a severe imbalance between outside money supply and asset market wealth.

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Last updated: 10.12.2020