Shafiullah, Muhammad, Khalid, Usman and Chaudhry, Sajid M. (2021). Do stock markets play a role in determining COVID-19 economic stimulus? A cross-country analysis. World Economy ,
Abstract
This paper makes an innovative contribution to the extant literature by analysing the determinants of economic stimulus packages implemented by governments in response to the COVID-19 pandemic. In particular, we explore whether stock market declines observed in many countries can predict the size of COVID-19 stimulus packages. Moreover, we explore whether a country's level of income can augment the underlying relationship between stock market declines and stimulus packages. The findings reveal that a larger stock market decline results in a larger stimulus package; however, this effect is only observed in countries that have an income level greater than the mean and/or median per capita gross domestic product (GDP). Moreover, our results show that monetary policy is more responsive to a stock market decline than fiscal policy. Thus, our results underscore the importance of international donor agencies such as the World Bank and International Monetary Fund (IMF) in supporting less affluent countries in coping with the adverse impacts of the COVID-19 pandemic on their economies.
Publication DOI: | https://doi.org/10.1111/twec.13130 |
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Divisions: | College of Business and Social Sciences > Aston Business School College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship College of Business and Social Sciences > Aston Business School > Centre for Personal Financial Wellbeing |
Additional Information: | This is the peer reviewed version of the following article: Shafiullah, M., Khalid, U. and Chaudhry, S.M. (2021), Do stock markets play a role in determining COVID-19 economic stimulus? A cross-country analysis. World Econ, which has been published in final form at https://doi.org/10.1111/twec.13130. This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving. Funding Information: This study is supported by United Arab Emirates University under the Start Up grant (# 31B126) |
Uncontrolled Keywords: | COVID-19 pandemic,coronavirus 2019,economic stimulus,stock market decline,Accounting,Finance,Economics and Econometrics,Political Science and International Relations |
Publication ISSN: | 1467-9701 |
Last Modified: | 16 Aug 2024 07:10 |
Date Deposited: | 30 Apr 2021 10:39 |
Full Text Link: | |
Related URLs: |
https://onlinel ... 1111/twec.13130
(Publisher URL) http://www.scop ... tnerID=8YFLogxK (Scopus URL) |
PURE Output Type: | Article |
Published Date: | 2021-04-20 |
Published Online Date: | 2021-04-20 |
Accepted Date: | 2021-04-01 |
Authors: |
Shafiullah, Muhammad
Khalid, Usman Chaudhry, Sajid M. ( ![]() |