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  • October 2023
  • Article
  • Review of Financial Studies

Stock Market Stimulus

By: Robin Greenwood, Toomas Laarits and Jeffrey Wurgler
  • Format:Print
  • | Pages:31
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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.)
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About The Author

Robin Greenwood

Finance
→More Publications

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More from the Authors
  • A Quantity-Driven Theory of Term Premia and Exchange Rates By: Robin Greenwood, Samuel G. Hanson, Jeremy C. Stein and Adi Sunderam
  • Rent Control in Boston, Again? By: Robin Greenwood, Richard S. Ruback, Robert Ialenti and Tom Quinn
  • Natural Gas in New England By: Robin Greenwood, Richard S. Ruback and Gil Highet
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