Is Money Printing Boosting Equity Prices?

Economists have long debated the effect of money printing and money supply on prices levels. A directly related topic that gains less attention is the relationship between growth in the supply of money and equity market appreciation. This is somewhat peculiar given that the “printing money” effect on the world’s equities is more relevant right now.

In order to show the connection, there are three sections here. The first inspects the growth in the global money supply by country since 2007. The second section addresses the performance of equity prices by country since 2007. The third section connects the two.

As a spoiler, a simple regression connection between the two comes out at 0.26. The 0.26 connection means that a 1 percent...