Do Macroeconomic Variables Influence on the Stock Market? A Theoretical Review
The purpose of this study is to review how macroeconomic variables influence on the stock mar-ket. The study
comprehensively reviews the finance theories and macroeconomic variables used by the past studies to investigate the nexus
between the macroeconomic variables and the stock market. The study employs 61 studies, published in the journals, which
are rated by the Australian Business of Deans Council (ABDC). As per the review, dividend discount model, arbitragepricing
theory and the efficient market model are the commonly used finance theories by the selected literature. The review
results further shows that, selected past research have given more emphasize on domestic macroeconomic variables and a
very poor attention on the international and global macroeconomic variables. Furthermore, as the impact of given
macroeconomic variables on a given stock market, varies based on different time intervals and based on different
econometrics techniques employed.
Index Terms - Stock market, macroeconomic variables, finance theories.