Publications
Publications
- October 2023
- Review of Financial Studies
Stock Market Stimulus
By: Robin Greenwood, Toomas Laarits and Jeffrey Wurgler
Abstract
We study the stock market 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 U.S. checks appear to have increased retail buying and share prices of retail-dominated portfolios. The Hong Kong payments increased overall turnover and share prices on the Hong Kong Stock Exchange. 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
Citation
Greenwood, Robin, Toomas Laarits, and Jeffrey Wurgler. "Stock Market Stimulus." Review of Financial Studies 36, no. 10 (October 2023): 4082–4112. (Also NBER Working Paper Series, No. 29827, January 2023.)