Abstract
The current health crisis has several socioeconomic influences that could be compared to those experienced during the 2008 economic and financial crisis. Governments around the world are making great efforts to sustain markets as there are signs showing that the health crisis will be followed by an economic crisis. In this study, we aim to investigate the impact of COVID-19 on the Romanian stock market. For this purpose, we considered the influence on the Bucharest Exchange Trading (BET) index of such variables as the number of new cases and the number of new deaths caused by COVID-19, measures taken by authorities, and the international economic context. The collected data covered the period between 11 March 2020 and 30 April 2021. The Autoregressive Distributed Lag (ARDL) Bound cointegration test was used to measure the impact of COVID-19 on the stock market. The results showed a significant long-term negative impact of the pandemic on the BET index for Romania, while the European economic context had a positive influence. Therefore, these results could be used by authorities as a good guideline for the efficient management of measures that aim to reduce the negative effects of the healthcare crisis.
Highlights
Ángel López-NicolásGlobally, humanity has been through several epidemics and pandemics
The results indicate that the monetary policy interest rate is strongly negatively correlated with the Bucharest Exchange Trading (BET) index, showing a positive effect of this measure on the monetary policy adopted by the National Bank of Romania
The study focuses on determining how the pandemic has affected the Romanian stock market over the period from 11 March 2020–30 April 2021 using three categories of variables: pandemic variables, variables reflecting the measures implemented by the national authorities, and variables describing the international economic context
Summary
Ángel López-NicolásGlobally, humanity has been through several epidemics and pandemics. This virus has been viewed as being unique through its high number of symptoms and high transmission rate This economic crisis caused by the current pandemic differs from the previous ones, such as the Great Depression of the 1930s and the Great Recession of 2007–2009, due to the fact that it involves multiple uncertain socioeconomic links. It was caused in large part by concerns related to the spread of the Coronavirus Disease 2019 (COVID-19) and the governmental policies aimed at limiting person-to-person contact. The health concerns of the public and the stay-at-home and shutdown orders designed to limit contact reduced cash flow to businesses and increased the number of unemployed workers [1]
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