How Did Financial Markets Respond to COVID-19 and Governmental Policies During the Different Waves of the Pandemic?

Abstract

This study investigates the impact of COVID-19 and the policies implemented by the authorities on financial markets during the different waves of the pandemic. We found significant correlations between COVID-19 new cases and the volatility of financial markets in most of the studied samples during the three studied waves. We also found that financial markets in developed countries present a significant positive market vision, and those of emerging economies present mixed results.

COVID-19 policy actions and inflation targeting in South Asia

“…Second, our findings contribute to enhancing the evolving literature on the impact of COVID-19 in Asian countries’ financial and economic systems (see, for instance, Jiang, Nie, & Monginsidi, 2017 ; Thampanya, Wu, Nasir, & Liu, 2020 ; Devpura, 2020 ; Bing, 2021 ; Yang and Deng, 2021 ; Gil-Alana, and Claudio-Quiroga, 2020 ; Sharma, 2020 ; Salisu, Lasisi and Olanarin, 2021; Bhera and Rath, 2021; Zhang, Zhang, Yu, & Feng, 2021 ; Thaker, 2022 ; Bouhali, Dahbani, & Dinar, 2022 ; Darjana, Wiryono, & Koesrindartoto, 2022 ).…”