Xiao Zilong | A study on the effects of economic strategies to combat COVID - 19 on the stock market
Recently, the 2020 Academic Symposium on International Trade Disputes and Globalization Restructuring, jointly organized by the Center for International Finance and Economics Research (CIFER) of the National Institute of Financial Research at Tsinghua University and the Center for Cross-border Digital Capital Research (IDC) of the Institute of Fintech at Tsinghua University, was held.2020 International Conference on US-China Trade Disputes and Reforms in GlobalizationThe meeting was successfully held online.Founder of Smart Manufacturing Factory (Shenzhen) Technology Co., Ltd.Xiao ZidragonAttended and shared their experiences with collaborators including Liu Feng from the School of Computer Science and Technology at East China Normal University, Luo Xiaopeng from the School of Economics and Management at Beijing University of Posts and Telecommunications, Kong Deli from the School of International Business Administration at Shanghai International Studies University, and Qi Jiayin from the Institute of Artificial Intelligence and Change Management at Shanghai University of International Business and Economics.The theme is "A study on the effects of economic strategies in response to COVID-19 on the stock and bond markets.The article.
Xiao Zilong is the founder of Smart Manufacturing Factory (Shenzhen) Technology Co., Ltd., a PhD in Finance from Huazhong University of Science and Technology, a postdoctoral researcher at the Blockchain and Smart Finance Research Center of Sun Yat-sen University, and the deputy director of the Blockchain Technology and Application Research Center of Shanghai University of International Business and Economics. He has led the implementation of solutions for large-scale financial technology projects and participated in blockchain transformation projects of listed companies. He is also a contributor to the book "Shenzhen Sample" commemorating the 40th anniversary of the establishment of the Shenzhen Special Economic Zone. He has extensive expertise in artificial intelligence, quantitative investment, and blockchain investment research.
Xiao Zilong
When sharing his article with collaborators, Xiao Zilong mentioned that...Stocks and bonds are two important financial instruments. The global COVID-19 pandemic has had a significant impact on financial markets. How to adopt appropriate economic policies to revive the stock and bond markets is a key concern for governments worldwide in their economic recovery efforts. Based on the event study methodology and the GARCH model, this study uses 26 countries as an analytical sample and collects relevant data from October 1, 2019 to April 1, 2020. The results show that: 1) COVID-19 had a greater impact on the stock market than the bond market; 2) Post-COVID-19 economic recovery policies have a significant impact on both the stock and bond markets; 3) Monetary policy causes greater volatility in the stock market than fiscal policy, while fiscal policy causes greater volatility in the bond market than monetary policy; 4) For the stock market, fiscal policy yields better returns; while for the bond market, monetary policy yields better returns. This study contributes to a deeper understanding of the mechanisms by which COVID-19 affects the stock and bond markets and has significant practical implications for government decision-making in post-COVID-19 economic recovery.
Zhou Lingling
Dr. Zhou Lingling, a postdoctoral researcher at the School of Public Policy and Management, Tsinghua University, commented on Professor Xiao's article. She considered it an excellent paper overall, studying the impact of fiscal and monetary policies on financial markets in response to COVID-19; it has certain policy significance, providing policy references for different countries and regions to fully consider the volatility risks of fiscal and monetary policies on stock and bond markets. She also provided a systematic review of the article. Dr. Zhou then raised relevant comments and questions: 1. Data timeframe: The main task of event research is to identify the event under study and the time period of stock price changes caused by that event. The data timeframe in this paper is from October 1, 2019 to April 1, 2020, covering the peak of the European epidemic (March) and the peak of the US epidemic (April-May). 2. The research conclusions of this paper are: monetary policy brings greater volatility to the stock market than fiscal policy, and fiscal policy has better returns; for the bond market, fiscal policy brings greater volatility than monetary policy, and monetary policy has better returns. How to assess the mixed effects of monetary and fiscal policies? Is the policy time lag considered? How should the impact of COVID-19 be assessed?
Special Forum on the Economics of the PandemicParticipating guests and scholars