Review

R. W. Hafer investigates several aspects of the efficient markets hypothesis: Do stock prices react only to unanticipated changes in the money stock? Are the magnitudes of these effects different across different monetary policy procedures?

G. J. Santoni examines this issue by analyzing the relationship between inflation and the stock prices of publicly traded banks. The author’s results indicate that the real share prices of banks fall when the actual rate of inflation is greater than the anticipated rate of inflation.