New research paper: The declining explanatory power of interest rates for stock market and business cycle dynamics

Prof. Dr. Sebastian Geissel and David Klein, a former student at Trier University of Applied Sciences, have jointly published a research article on the role of interest rates in the interactions between stock markets and business cycles. The study examines Germany, Japan, the United Kingdom, and the United States from 2000 to 2025 and identifies a structural change around 2020: Whereas stock markets previously led business cycles, business cycles have increasingly dominated in recent years. The results also show that the explanatory power of interest rates for the joint dynamics of stock markets and economic cycles has declined significantly in recent years.

The article “The declining explanatory power of interest rates for stock market and business cycle dynamics” has been published as an open-access article in Finance Research Letters, a leading international journal in the field of finance.