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Country Responses and the Reaction of the Stock Market to COVID-19—a Preliminary Exposition

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Version 2 2024-06-06, 12:20
Version 1 2020-08-13, 14:24
journal contribution
posted on 2024-06-06, 12:20 authored by DHB Phan, PK Narayan
© 2020 Taylor & Francis Group, LLC. 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.

History

Journal

Emerging Markets Finance and Trade

Volume

56

Season

Special Issue: Research on Pandemics

Pagination

2138-2150

Location

Abingdon, Eng.

Open access

  • Yes

ISSN

1540-496X

eISSN

1558-0938

Language

English

Publication classification

C1 Refereed article in a scholarly journal

Issue

10

Publisher

Taylor & Francis