The Unprecedented Stock Market Impact of COVID-19
Northwestern University · National Bureau of Economic Research · +3 more institutions
Abstract
No previous infectious disease outbreak, including the Spanish Flu, has impacted the stock market as forcefully as the COVID-19 pandemic.In fact, previous pandemics left only mild traces on the U.S. stock market.We use text-based methods to develop these points with respect to large daily stock market moves back to 1900 and with respect to overall stock market volatility back to 1985.We also evaluate potential explanations for the unprecedented stock market reaction to the COVID-19 pandemic.The evidence we amass suggests that government restrictions on commercial activity and voluntary social distancing, operating with powerful effects in a serviceoriented economy, are the main reasons the U.S. stock market…
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Authors
6- SBScott BakerCorresponding
Northwestern University, National Bureau of Economic Research, University of Chicago, University of Pennsylvania, Stanford University
- NBNicholas Bloom
Northwestern University, National Bureau of Economic Research, University of Chicago, University of Pennsylvania, Stanford University
- SJSteven J. Davis
Northwestern University, National Bureau of Economic Research, University of Chicago, University of Pennsylvania, Stanford University
- KKKyle Kost
Northwestern University, National Bureau of Economic Research, University of Chicago, University of Pennsylvania, Stanford University
- MSMarco Sammon
Northwestern University, National Bureau of Economic Research, University of Chicago, University of Pennsylvania, Stanford University
Topics & keywords
- Pandemic
- Stock market
- Coronavirus disease 2019 (COVID-19)
- Stock (firearms)
- Severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2)
- 2019-20 coronavirus outbreak
- Volatility (finance)
- Business
- Good health and well-being