Government Policy Response to COVID-19 and Stock Market Return: The Case of Iran

Sakine Owjimehr () and Ali Hussein Samadi ()
Additional contact information
Sakine Owjimehr: Shiraz University
Ali Hussein Samadi: Shiraz University

Chapter Chapter 19 in Socioeconomic Dynamics of the COVID-19 Crisis, 2022, pp 423-439 from Springer

Abstract: Abstract In this chapter, we use four indices showing government intervention in facing COVID-19, including stringency index, government response index, containment and health index, and economic support index. The stock market return of Iran from 22 Feb 2020 to 12 June 2021 is our dependent variable. Using a threshold regression, we show that government intervention indices have different effects on the stock market return in Iran, so that when the growth rate of confirmed cases of COVID-19 is less than 0.06%, government intervention cannot affect the stock market return. However, in a situation with a higher growth rate of confirmed cases of COVID-19, stringency index, government response index, and containment and health index reduce the return, but the economic support index increases return. In summary, first, the impact of government intervention on the stock market in Iran depends on the growth rate of confirmed cases. Second, the government faces a trade-off between citizens’ health and stock market return during the high incidence rate of COVID-19.

Keywords: COVID-19; Stock markets; Government policy responses; Iran (search for similar items in EconPapers)
JEL-codes: G11 G18 H51 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:conchp:978-3-030-89996-7_19

Ordering information: This item can be ordered from
http://www.springer.com/9783030899967

DOI: 10.1007/978-3-030-89996-7_19

Access Statistics for this chapter

More chapters in Contributions to Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().