The USV Annals of Economics and Public Administration, Vol 11, No 2

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The role of mutual funds in U.S. economy

Delia-Elena Diaconaşu

Abstract


The main aim of this article is to present the correlations between different macroeconomic indicators and the dynamics of mutual funds in U.S. The direct relationship between inflation rate and net subscription of stock funds in the US market is validated. On the other hand, a lower interest rate in US means investing people’s savings in monetary and bond funds. We have also shown an indirect link between interest rate and bond funds. We couldn’t highlight the direct link between global funds and its balance of payments and the country's GDP. The weak correlation between balance of payments and global funds is due to the fact that in the current account balance are included other financial flows that are much larger and with a greater influence on it, such as imports and exports. Also, the weak correlation between the net assets of global funds and the evolution of GDP is due to influence of other factors that leads to the decision of investing internationally. We have also shown the importance of investment funds by increasing what they hold in total savings of the population. This increase is explained both by placing the weight of massive cash of traders in investment funds and by the existence of a higher utility of personal savings invested in investment funds aimed at saving for retirement. Also we briefly highlighted the role of investment companies in the State unemployment rate.

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                     Ştefan cel Mare University of Suceava                   Faculty of Economics, Administration and Business
 

 

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