Publications
Publications
- 2022
Stock Market Stimulus
By: Robin Greenwood, Toomas Laarits and Jeffrey Wurgler
Abstract
The stock market crash in March 2020 was followed by a historic rebound, particularly among stocks favored by retail investors. We study the effects of the arrival of the three rounds of “stimulus checks” to U.S. taxpayers and the single round of direct payments to Hong Kong citizens. The first two rounds of payments in the U.S. appear to have increased retail buying and share prices of retail-dominated portfolios. The Hong Kong payments increased overall market turnover and share prices in Hong Kong and mainland Chinese markets, especially in large-cap portfolios. We cannot rule out that these price effects were permanent. The findings raise novel questions about the role of fiscal stimulus in the stock market.
Keywords
Stock Market; COVID-19 Pandemic; Fiscal Stimulus; Stimulus Payments; Impact; Stocks; System Shocks; Price; Spending; United States; Hong Kong; China
Citation
Greenwood, Robin, Toomas Laarits, and Jeffrey Wurgler. "Stock Market Stimulus." NBER Working Paper Series, No. 29827, March 2022.