01681cas a2200241 a 4500 AALejournalIMF010111 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451974492 1018-5941 BD-DhAAL BD-DhAAL International Monetary Fund. Exchange Rate Movements and International Interdependence of Stock Markets. Washington, D.C. : International Monetary Fund, 1989. 1 online resource (52 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper investigates linkages between stock markets in seven industrialized countries since 1974. Empirical evidence shows that both nominal and real stock prices (and returns) are strongly positively correlated across countries, and that nominal exchange rate changes do not have systematic effects on nominal stock prices. A two-country theoretical model is developed and an attempt is made to reconcile the empirical findings with the properties of this model. Independent evidence on the main sources of shocks is used to argue that the time-varying correlation in the data can be reconciled with the predictions of the theory. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1989/044 Full text available on IMF http://elibrary.imf.org/view/journals/001/1989/044/001.1989.issue-044-en.xml IMF e-Library