The Impact of Monetary and Fiscal Stimulus on Stock Returns During the COVID-19 Pandemic

Chinmaya Behera (), Badri Rath and Pramod Kumar Mishra ()
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Chinmaya Behera: Economics and General Management, Goa Institute of Management, Goa, India, (Corresponding author: Goa Institute of Management, Poriem, Sattari, Goa)
Pramod Kumar Mishra: School of Management, University of Hyderabad, Telangana, India

Working Papers from Madras School of Economics,Chennai,India

Abstract: We contribute to the literature by investing the impact of monetary and fiscal stimulus and exchange rate on stock returns during the COVID-19 pandemic in Australia, China, India, and Indonesia. By employing the machine learning approach, We find that monetary stimulus positively boosts the stock return of Indonesia. Contrary, fiscal stimulus adversely affected stock return in Australia. The exchange rate positively impacts stock return for both India and Indonesia during the COVID-19 pandemic. However, the findings from this study reveal that both monetary and fiscal stimulus have no effect on the stock market return in the case of China and India. Policymakers needs better strategy to counter the extreme events like pandemic. Our model is robust to the alternative model specification.

Keywords: Monetary Policy; Fiscal Policy; Stock Return; Machine Learning; COVID-19 (search for similar items in EconPapers)
JEL-codes: G11 G15 G18 (search for similar items in EconPapers)
Pages: 3 pages
Date: 2023-09
New Economics Papers: this item is included in nep-big, nep-cba, nep-cna and nep-sea
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Related works:
Journal Article: The impact of monetary and fiscal stimulus on stock returns during the COVID-19 Pandemic (2024)
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