Covid-19 health policy intervention and volatility of Asian capital markets

Abstract

The Covid-19 pandemic continues to disturb the global economy and capital markets. Governments across the globe relentlessly enact health policy measures to contain coronavirus and undertake economic relief programs to reduce the impacts on their economies. This paper examines the effects of Covid-19 government health measures on the volatility of capital markets in East Asian economies. The study applies Monte Carlo type simulations to determine stock price volatility over the period when health policy measures were implemented. The findings indicate that different health policy measures have affected investors’ behavior and caused volatility of stock markets. However, there are country-different impacts on the volatility of these capital markets. The findings provide important insights that are useful when reviewing Covid-19 health policy measures to mitigate the impacts on stock markets.