Publication

This paper analyzes the interaction of stock market movements and politics in Germany. In contrast to empirical evidence available for the US, the authors do not find that German stock market returns tend to be higher during liberal than during conservative governments. As another contrast, they find no evidence for an election cycle in German stock market returns. However, they state that estimated populartiy functions and vector autoregressive models suggest that stock market returns have had an impact on the popularity of German governments.