Shaking Stability: COVID-19 Impact on the Visegrad Group Countries’ Financial Markets

Czech, Katarzyna; Wielechowski, Michał; Kotyza, Pavel; Benešová, Irena; Laputková, Adriana

doi:10.3390/su12156282

Cited by 83 publications

(73 citation statements)

References 68 publications

(81 reference statements)

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“…The third strand focuses on the impact on financial and economic systems. Some studies investigate the impact of COVID-19 on different financial markets (e.g., Albulescu, 2020 ; Baker et al, 2020 ; Czech et al, 2020 ; Zhang et al, 2020 ). Some others focus on the efficiency of the currency market and the predictability of its volatility ( Aslam et al, 2020 ; Iyke, 2020 ).…”

Section: Introductionmentioning

confidence: 99%

Measuring the global economic impact of the coronavirus outbreak: Evidence from the main cluster countries

Louhichi

Ftiti

Ameur

2021

Technological Forecasting and Social Change

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This study measures the global economic impact of the coronavirus outbreak. This pandemic is characterized by demand and supply shocks, leading to restrictions on trade, product and service transactions, and capital flow mobility. We investigate its impact on currency markets, stock market performance, and investor fear sentiment. We employ an empirical, time-scale approach based on the continuous wavelet transform—appropriate for time-series characteristics during times of turmoil. Based on daily data for four main cluster countries (China, France, Italy, and the USA), our results show that the impact of the pandemic's evolution on the main economic indicators in China exhibits a different pattern from France, Italy, and the USA. For China, our results show that the pandemic evolution co-moves with the main economic indicators only in the short term (one week). The effect is more persistent in other countries. We also show that the main economic indicators are more sensitive to pandemic evolution assessed by the number of deaths rather than number of cases, and that currency and financial markets are affected in different timescales. These findings might assist policymakers in addressing the feedback loop between currency markets and capital flows and help investors find alternative assets to hedge against heath shocks.

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Section: Introductionmentioning

confidence: 99%

Measuring the global economic impact of the coronavirus outbreak: Evidence from the main cluster countries

Louhichi

Ftiti

Ameur

2021

Technological Forecasting and Social Change

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show abstract

“…The global pandemic, causing fiscal and monetary interventions, social distancing, and nation-wide quarantine, has resulted in uncertainty among institutions, agents, and consumers. The novel coronavirus has shaken the global economy on an unprecedented scale [26], and as a black swan [27] has affected the global financial markets significantly [28,29]. There are numerous studies on the COVID-19 pandemic impact on agricultural commodity markets [30][31][32][33].…”

Section: Introductionmentioning

confidence: 99%

Sugar Prices vs. Financial Market Uncertainty in the Time of Crisis: Does COVID-19 Induce Structural Changes in the Relationship?

et al. 2021

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Securitization of the agricultural commodity market has accelerated since the beginning of the 21st century, particularly in the times of financial market uncertainty and crisis. Sugar belongs to the group of important agricultural commodities. The global financial crisis and the COVID-19 pandemic has caused a substantial increase in the stock market volatility. Moreover, the novel coronavirus hit both the sugar market’s supply and demand side, resulting in sugar stock changes. The paper aims to assess potential structural changes in the relationship between sugar prices and the financial market uncertainty in a crisis time. In more detail, using sequential Bai–Perron tests for structural breaks, we check whether the global financial crisis and the COVID-19 pandemic have induced structural breaks in that relationship. Sugar prices are represented by the S&P GSCI Sugar Index, while the S&P 500 option-implied volatility index (VIX) is used to show stock market uncertainty. To investigate the changes in the relationship between sugar prices and stock market uncertainty, a regression model with a sequential Bai–Perron test for structural breaks is applied for the daily data from 2000–2020. We reveal the existence of two structural breaks in the analysed relationship. The first breakpoint was linked to the global financial crisis outbreak, and the second occurred in December 2011. Surprisingly, the COVID-19 pandemic has not induced the statistically significant structural change. Based on the regression model with Bai–Perron structural changes, we show that from 2000 until the beginning of the global financial crisis, the relationship between the sugar prices and the financial market uncertainty was insignificant. The global financial crisis led to a structural change in the relationship. Since August 2008, we observe a significant and negative relationship between the S&P GSCI Sugar Index and the S&P 500 option-implied volatility index (VIX). Sensitivity analysis conducted for the different financial market uncertainty measures, i.e., the S&P 500 Realized Volatility Index confirms our findings.

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“…The pandemic has had a negative impact on the financial markets of Hungary and Visegrad countries. It has affected the market participants' perception of the future price movement in financial markets (Czech et al, 2020).…”

Section: Major Social and Economic Effects Of The Pandemic In Hungarymentioning

confidence: 99%

Regional effects of the COVID-19 pandemic and policy responses in Hungary

Kovács¹,

Koós²,

Uzzoli³

et al. 2020

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Relevance. The new coronavirus pandemic (COVID-19) has brought major changes to everyday life and economy in 2020. The impacts of the pandemic are still difficult to measure and interpret. This paper analyses the key socio-economic factors that shaped the course of the pandemic and its regional effects in Hungary. Research objective. The aim of this paper is to provide a secondary data-based analysis of regional disparities in Hungary as well as the implications of the coronavirus pandemic and the related policy responses. Data and methodology. The analysis consisted of the three stages: first, we processed the official epidemiologic data related to the coronavirus pandemic and the territorial patterns of infections as well as the data on the socio-economic impacts of the lockdown (on retail trade, employment, tourism, local governments’ revenues, etc). Second, we collected the data related to the socio-economic effects of the pandemic and revealed the territorial impacts of the crisis. Finally, we evaluated the government’s measures and interventions introduced in the first wave of the pandemic in terms of their efficiency. Results. Our results demonstrate that while the epicentre of the pandemic was the capital city and its surrounding area, the socio-economic impacts of containment measures implemented by the Hungarian government were felt across the whole country. In some areas, the lockdown measures could have been unreasonably tight as no reasonable justification for these restrictions was provided. Therefore, territorial monitoring and development of regionally differentiated policies are the main tasks in preparation for further waves of the pandemic. In our opinion, it is necessary to devise an action plan that would regulate the protocols of prevention and protection in connection with the regional focal points (hospitals, nursing homes, schools, etc.) and their immediate surroundings. Conclusions. Although territorial aspects have been taken into account by the government in their efforts to contain the pandemic in Hungary, they have been given significantly less attention in terms of socio-economic support. Thus, as the article makes clear, it is important to devise and implement regionally differentiated policies of containment as well as socio-economic protection measures.

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Shaking Stability: COVID-19 Impact on the Visegrad Group Countries’ Financial Markets

Cited by 83 publications

References 68 publications

Measuring the global economic impact of the coronavirus outbreak: Evidence from the main cluster countries

Measuring the global economic impact of the coronavirus outbreak: Evidence from the main cluster countries

Sugar Prices vs. Financial Market Uncertainty in the Time of Crisis: Does COVID-19 Induce Structural Changes in the Relationship?

Regional effects of the COVID-19 pandemic and policy responses in Hungary

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