Determinants of the value of common stocks in the U.S.: An econometric analysis for the period 1968-1988

The study tested three types of models, i.e. financial, macroeconomic, and the combined financial-macroeconomic model (FINMAC), an aggregation of the expanded Gordon model and the IS-LM model. This was done to determine the impact of certain financial and macroeconomic variables on stock prices using the S & P composite, industrial, utility, financial, and transportation stock price indices. The models were tested in two ways: first, in five sub-periods and second for the entire 1968-1988 period.