Have Stock Markets across the Globe Been Kidnapped by the Covid-19 Pandemic?

Huaibing Yu

Bulletin of Applied Economics, 2020, vol. 7, issue 2, 165-173

Abstract: Based on data of 6 major developed stock markets, this paper provides empirical evidences about how stock markets across the globe behave during the Covid-19 global pandemic. Evidences show that the movements of most stock market indices were individually dependent on the development of the Covid-19 pandemic in the corresponding countries during the pre-bottom period. However, this phenomenon largely faded away after stock markets bottomed out and entered into the recovery stage. Vector error correction model (VECM) confirms the cross-markets equilibrium during the Covid-19 pandemic and the majority of stock markets are expected to restore to new equilibriums relatively quickly if exogenous shocks are introduced in the future.

Keywords: Covid-19 Pandemic; Stock Market; Cointegration; Market Behavior; Market Impact (search for similar items in EconPapers)
JEL-codes: G10 G15 G17 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:rmk:rmkbae:v:7:y:2020:i:2:p:165-173

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