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Stocks Vote with Their Feet: Can a Piece of Paper Document Fights the COVID-19 Pandemic?

J. Su, Q. Zhong

arXiv 5 May 2020 · Econometrics

arXiv:2005.02034 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Assessing the trend of the COVID-19 pandemic and policy effectiveness is essential for both policymakers and stock investors, but challenging because the crisis has unfolded with extreme speed and the previous index was not suitable for measuring policy effectiveness for COVID-19. This paper builds an index of policy effectiveness on fighting COVID-19 pandemic, whose building method is similar to the index of Policy Uncertainty, based on province-level paper documents released in China from Jan.1st to Apr.16th of 2020. This paper also studies the relationships among COVID-19 daily confirmed cases, stock market volatility, and document-based policy effectiveness in China. This paper uses the DCC-GARCH model to fit conditional covariance's change rule of multi-series. This paper finally tests four hypotheses, about the time-space difference of policy effectiveness and its overflow effect both on the COVID-19 pandemic and stock market. Through the inner interaction of this triad structure, we can bring forward more specific and scientific suggestions to maintain stability in the stock market at such exceptional times.

Citation extraction

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Baker, Scott R., Nicholas, Bloom, J., Davis Steven (2013) Measuring Economic Policy Uncertainty0.40511100%
2Vgtle, Eva Maria (2014) Policy Diffusion, Transfer, and Convergence0.40511100%
3Gilardi, Fabrizio (2010) Who Learns from What in Policy Diffusion Processes?0.40511100%
4O., Gostin Lawrence (2002) The Model State Emergency Health Powers Act: Public Health and Civil Liberties in a Time of Terrorism0.40511100%
5(2013) Environmental Protection Bureau Leadership at the Provincial Level in China: Examining Diverging Career Backgrounds and Appointm…0.40511100%
6Ozili, Peterson, Arun, Thankom Spillover of COVID-19: Impact on the Global Economy0.40511100%
7Rosa, Carlo (2014) The high-frequency response of energy prices to U.S. monetary policy: Understanding the empirical evidence0.40511100%
8Shipan, Charles R., Volden, Craig (2012) Policy Diffusion: Seven Lessons for Scholars and Practitioners0.40511100%
9Blei, David M, Ng, Andrew Y, Jordan, Michael I (2003) Latent dirichlet allocation0.40511100%
10Ding, Zhuanxin, Engle, Robert F (2001) Large scale conditional covariance matrix modeling, estimation and testing0.40511100%

Showing the top 10 of 15 scored citations.