The nCOVID-19 and financial stress in the USA: health is wealth

Andrew Adewale Alola,Samuel Asumadu Sarkodie,Uju Violet Alola

doi:10.1007/s10668-020-01029-w

Andrew Adewale Alola, Samuel Asumadu Sarkodie + Show 1 more

Open Access

https://doi.org/10.1007/s10668-020-01029-w

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Abstract

Since its first report in the USA on 13 January 2020, the novel coronavirus (nCOVID-19) pandemic like in other previous epicentres in India, Brazil, China, Italy, Spain, UK, and France has until now hampered economic activities and financial markets. To offer one of the first empirical insights into the economic/financial effect of the COVID-19 pandemic, especially in the USA, this study utilized the daily frequency data for the period 25 February 2020–30 March 2020. By employing the empirical Markov switching regression approach and the compliments of cointegration techniques, the study establishes a two-state (stable and distressing) financial stress situation resulting from the effects of COVID-19 daily deaths, COVID-19 daily recovery, and the USA’ economic policy uncertainty. From the result, it is assertive that daily recovery from COVID-19 eases financial stress, while the reported daily deaths from COVID-19 further hamper financial stress in the country. Moreover, the uncertainty of the USA’ economic policy has also cost the Americans more financial stress and other socio-economic challenges. While the cure for COVID-19 remains elusive, as a policy instrument, the USA and similar countries with high severity of COVID-19 causalities may intensify and sustain the concerted efforts targeted at attaining a landmark recovery rate.

Highlights

IntroductionWith 32,429,965 cases (consisting of over 200 countries and territories) and accounting for the death of 985,823 persons globally as reported by the World Health Organization (WHO 2020) on 26 September 2020, the ravaging effect of the novel coronavirus disease (COVID-19) has remained a global emergency
With 32,429,965 cases and accounting for the death of 985,823 persons globally as reported by the World Health Organization (WHO 2020) on 26 September 2020, the ravaging effect of the novel coronavirus disease (COVID-19) has remained a global emergency
This implies that a report of higher recoveries from COVID-19 is responsible for minimal financial stress

Summary

Introduction

With 32,429,965 cases (consisting of over 200 countries and territories) and accounting for the death of 985,823 persons globally as reported by the World Health Organization (WHO 2020) on 26 September 2020, the ravaging effect of the novel coronavirus disease (COVID-19) has remained a global emergency. Giving the implementation of these measures, most nations continue to experience a spillover effect of the COVID-19 pandemic to the socio-economic aspects: the primary sectors, secondary sectors, and the tertiary sectors of the world economy (Kostova et al 2019; Gregori et al 2020; Khalatbari-Soltani et al 2020; Mason-D’Croz et al 2020; Nicola et al 2020). To safeguard livelihoods and sustain economic development due to the global pandemic shocks, several economic activities instituted across countries include fiscal policy cut, exchange rate, and monetary intervention (Sarkodie and Owusu 2020b)

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