What drives stocks during the Corona-crash? News attention vs. rational expectation
Loading...
Date
2020-06-19
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
We explore if the corona-crash 2020 was driven by news attention or rational expectations about the pandemic’s economic impact. Using a sample of 64 national stock markets covering 94% of the world’s GDP, we find the stock markets’ decline to be mainly associated with higher news attention and less with rational expectation. We estimate the economic cost from the news hype to amount to USD 3.5 trillion for the US and USD 200 billion on average for the rest of the G8 countries.
Description
Table of contents
Keywords
Corona-crash, News attention, Investor expectation