How Different Asset Classes Hedge Against Inflation Risk

Abstract

I conducted this research with the aim of examining the ability of stocks, gold, and real estate to hedge against CPI inflation risk. I focused the study on the United States over two different time periods: one between 1968 and 2023, and the other between 2000 and 2023. The cointegration tests' results highlight effective inflation hedging capabilities for stocks and partially for real estate, whereas gold is found to not be an effective inflation hedge. The analysis conducted on returns does not find any significant relationship, aligning with the previous literature.