Stock Market Stimulus

Robin Greenwood, Toomas Laarits, Jeffrey Wurgler and Tarun Ramadorai

The Review of Financial Studies, 2023, vol. 36, issue 10, 4082-4112

Abstract: We study the stock market effects of the arrival of the three rounds of “stimulus checks” to U.S. taxpayers and the single round of direct payments to Hong Kong citizens. The first two rounds of U.S. checks appear to have increased retail buying and share prices of retail-dominated portfolios. The Hong Kong payments increased overall turnover and share prices on the Hong Kong Stock Exchange. We cannot rule out that these price effects were permanent. The findings raise novel questions about the role of fiscal stimulus in the stock market.Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

JEL-codes: G14 G40 (search for similar items in EconPapers)
Date: 2023
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