To the surprise of, in all likelihood, not only business journalists, the available evidence on the effects of political variables on both stock returns and volatility is scant and mixed. We investigate whether this weak and conflicting evidence may be due to limited sample sizes and too narrow...

This paper investigates the effects of inflation and inflation variability on the economic and stock market activity within a VAR framework by using U.S data for the 1988:01-2002:12 period. Our results show that the detrimental effects of inflation come from the inflation variability, not the...