TY - JOUR
T1 - Country responses and the reaction of the stock market to COVID-19—a preliminary exposition
AU - Phan, Dinh Hoang Bach
AU - Narayan, Paresh Kumar
N1 - Publisher Copyright:
© 2020 Taylor & Francis Group, LLC.
Copyright:
Copyright 2020 Elsevier B.V., All rights reserved.
PY - 2020
Y1 - 2020
N2 - As the coronavirus pandemic (COVID-19) has amplified so has country responses to it. With COVID-19 taking its toll on humans, as reflected in the number of people infected by, and deaths from, COVID-19, countries responded by locking down economic activity and peoples movement, imposing travel bans, and implementing stimulus packages to cushion the unprecedented slowdown in economic activity and loss of jobs. This article provides a commentary on how the most active financial indicator–namely, the stock price–reacted in real-time to different stages in COVID-19’s evolution. We argue that, as with any unexpected news, markets over-react and as more information becomes available and people understand the ramifications more broadly the market corrects itself. This is our hypothesis which needs robust empirical verification.
AB - As the coronavirus pandemic (COVID-19) has amplified so has country responses to it. With COVID-19 taking its toll on humans, as reflected in the number of people infected by, and deaths from, COVID-19, countries responded by locking down economic activity and peoples movement, imposing travel bans, and implementing stimulus packages to cushion the unprecedented slowdown in economic activity and loss of jobs. This article provides a commentary on how the most active financial indicator–namely, the stock price–reacted in real-time to different stages in COVID-19’s evolution. We argue that, as with any unexpected news, markets over-react and as more information becomes available and people understand the ramifications more broadly the market corrects itself. This is our hypothesis which needs robust empirical verification.
KW - Coronavirus
KW - COVID-19
KW - lockdown
KW - pandemic
KW - travel ban
UR - http://www.scopus.com/inward/record.url?scp=85088529298&partnerID=8YFLogxK
U2 - 10.1080/1540496X.2020.1784719
DO - 10.1080/1540496X.2020.1784719
M3 - Article
AN - SCOPUS:85088529298
SN - 1540-496X
VL - 56
SP - 2138
EP - 2150
JO - Emerging Markets Finance and Trade
JF - Emerging Markets Finance and Trade
IS - 10
ER -