Business Associate Professor Tai Yi has had his paper, “Inflation Hedging and Industry Stock Returns,” published in the Business Research Consortium Academy Journal of Business, Vol. 7, No. 1.
The paper outlines research Dr. Yi has done on inflation-hedging abilities of stock returns in cyclical and noncyclical industries. The data he obtained was between the years 1961 to 2014. This information allowed Yi to compare cyclical industries -- those that are affected by the business cycle that have higher revenues during times of a good economy and begin to fail during an economic downturn -- to those that are noncyclical, or are not affected by the business cycle.
By testing the data and applying concepts such as the Fisher effect and the Fama-French three factor model, Yi was able to determine that stocks of the noncyclical industry portfolio have hedged inflation better than stocks of the cyclical industry portfolio -- particularly between 1983 and 2001.
The Business Research Consortium Academy Journal of Business provides analysis of industry best practices, commentary and applied research. The paper can be found online.
