ABSTRACT
This paper examines the relationship between investor fear in the cryptocurrency market and Bitcoin prices by considering the potential effects of the ongoing COVID-19 pandemic during the period of May 5, 2018 and December 10, 2020. The existence of structural changes in the time series for the full sample reveals a non-constant causality between fear sentiment and Bitcoin prices, which leads us to apply a bootstrap rolling window Granger causality test. Our results show that both negative and positive interactions between fear sentiment and Bitcoin prices occur during several subperiods. The nature of these interactions changes significantly before and during the pandemic. Thus, we contribute to the fast-growing literature on the financial effects of the COVID-19 global pandemic, as well as to the debate on whether to classify Bitcoin as a new asset, speculative investment, currency, or safe haven asset.
ABSTRACT
In response to the COVID-19 pandemic, developing countries are increasing health spending to save lives. Such a response raises questions about the economic impact of this expenditure in terms of income growth that determines the development trajectory of these countries. This paper is the first to apply dynamic linear and threshold panel data models to capture the dynamic impact of health expenditure on growth on a large sample of developing countries, while addressing endogeneity bias and taking into account different levels of human and physical capital, as well as a set of health expenditure indicators. The main results show that while public and private domestic health expenditure increase income growth, external inflows of health expenditure do not. In addition, this positive impact is enhanced by a higher level of human and physical capital, thereby demonstrating complementarity rather than substitutability between investments in health, physical and human capital.