For a literature survey in my university class, I have been asked the question "How does inflation impact stock returns?".

After reading some informal articles (in periodicals/ the general internet), I come to the conclusion that inflation is bad for corporate profits and therefore will have a negative impact on stock returns.

From the academic literature, I find that inflation should have a positive relationship with stock returns as "holding assets should compensate for inflation".

My question is, from an academic perspective, can anyone think of any papers which think the relationship should be negative.

I have a deadline on this, and yes I could survey many article by myself (i have already read a few) but I am wondering if someone could point me in the correct direction.


1 Answer 1


This is not peer reviewed, but it fits the bill and is one of my favorite pieces on this topic: Inflation in 2010 and Beyond. I also recommend Antii Ilmanen’s Expected Returns, which has an entire chapter dedicated to inflation and asset returns. You can also review the papers that Antii references in that chapter.

  • $\begingroup$ Perfect answer! $\endgroup$
    – user22485
    Commented Sep 27, 2018 at 8:39

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