Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • 2022
  • Working Paper

Stock Market Stimulus

By: Robin Greenwood, Toomas Laarits and Jeffrey Wurgler
  • Format:Electronic
  • | Language:English
ShareBar

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.
  • Read Now

About The Author

Robin Greenwood

Finance
→More Publications

More from the Authors

    • April 2022
    • Journal of Finance

    Predictable Financial Crises

    By: Robin Greenwood, Samuel G. Hanson, Andrei Shleifer and Jakob Ahm Sørensen
    • December 2021
    • Faculty Research

    Grace Capital

    By: Sara Fleiss, Robin Greenwood, Eren Kuzucu and Denise Han
    • Fall 2020
    • Brookings Papers on Economic Activity

    Sizing Up Corporate Restructuring in the COVID Crisis

    By: Robin Greenwood, Benjamin Iverson and David Thesmar
More from the Authors
  • Predictable Financial Crises By: Robin Greenwood, Samuel G. Hanson, Andrei Shleifer and Jakob Ahm Sørensen
  • Grace Capital By: Sara Fleiss, Robin Greenwood, Eren Kuzucu and Denise Han
  • Sizing Up Corporate Restructuring in the COVID Crisis By: Robin Greenwood, Benjamin Iverson and David Thesmar
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Digital Accessibility
Copyright © President & Fellows of Harvard College