This study examines whether financial markets, especially excess stock returns, contain information about changes in future values of certain macroeconomic variables. Earlier literature documents that term spreads of interest rates can predict both nominal activity, i.e. inflation, and real activity, i.e. output, consumption and industrial production, in economy. We combine stock returns and te...

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this study investigates the effects of  macroeconomic variables and their role in development of foreign exchange market. the foreign exchange market is the mechanism by which a person of firm transfers purchasing power form one country to another, obtains or provides credit for international trade transactions, and minimizes exposure to foreign exchange risk. the foreign exchange transaction i...