Back in 1933 the US had experienced years of deflation and nominal interest rates were close to zero. FDR sharply devalued the dollar over a period of 10 months, and stock prices closely tracked the value of foreign exchange during this period of monetary stimulus. Last year the Japanese did the same, and Marcus Nunes has a great post showing that the results were pretty similar. Here are some of his graphs:
That certainly looks like a positive correlation. Some people will say; “QE only helps the asset markets, it doesn’t boost NGDP.” I don’t know how something could dramatically impact stock prices without impacting nominal spending, but in any case NGDP growth picked up in Japan last year.
Others will ask; “What makes you think higher NGDP growth will lead to higher RGDP growth?” This does: