Monetary Policies and Financial Stress During the COVID-19 Pandemic: An Event Study Analysis

Using an event study design, this paper examines the effects of announcements of financial policies, especially monetary policies, on a measure of financial stress in some advanced and emerging economies during the COVID-19 pandemic period. We construct a daily financial stress index for 15 countries during the period from April 1, 2019 to September 30, 2021 . Our results show that announcing financial policies of any type increased financial stress on the day the policy was announced but the effect faded away rather quickly. Moreover, different types of financial policy announcements had different effects on the financial stress subindices. We also find that each component of financial stress responds to the announcement of financial policies differently and announcements of financial policies affect financial stress in most of the countries in our sample, but to different degrees.

Monetary Policies and Financial Stress During the COVID-19 Pandemic: An Event Study Analysis

Using an event study design, this paper examines the effects of announcements of financial policies, especially monetary policies, on a measure of financial stress in some advanced and emerging economies during the COVID-19 pandemic period. We construct a daily financial stress index for 15 countries during the period from April 1, 2019 to September 30, 2021 . Our results show that announcing financial policies of any type increased financial stress on the day the policy was announced but the effect faded away rather quickly. Moreover, different types of financial policy announcements had different effects on the financial stress subindices. We also find that each component of financial stress responds to the announcement of financial policies differently and announcements of financial policies affect financial stress in most of the countries in our sample, but to different degrees.

A dívida pública, o câmbio e a dinâmica privada de alocação da riqueza financeira: limites e possibilidades da política fiscal

O artigo avalia como na economia brasileira durante os primeiros meses da pandemia da Covid-19 a dinâmica privada de alocação da riqueza financeira potencializou a instabilidade macroeconômica, condicionando as possibilidades e os limites das políticas fiscal e monetária, em particular via efeitos sobre o câmbio. São discutidas as razões da volatilidade financeira e seus impactos sobre o manejo da política econômica. Analisa-se o papel da especulação, enfatizando que – no contexto de juros baixos, que vigorou até 2020, e da proliferação de estratégias de investimento e de gestão de risco procíclicas por investidores locais, com destaque para os fundos multimercados – ela tem sido uma fonte de ampliação da instabilidade e da volatilidadedos preços. O texto discute ainda ideias para que a regulação incentive a diversidade de visões e de estratégias de investimento, combatendo as externalidades negativas da especulação.Alternate : The article assesses how macroeconomic instability was amplified in the Brazilian economy during the first months of the Covid-19 pandemic by the private dynamics of financial wealth allocation. It affects the possibilities and limits of fiscal and monetary policies, in particular via effects on the exchange rate. The general reasons for financial volatility and its impacts on the management of economic policy are also discussed. The role of speculation is analyzed. In the context of low interest rates, which prevailed until 2020, and the proliferation of procyclical investment and risk management strategies by local investors, especially hedge funds – it has been a source of increased instability and volatility in prices. The text also discusses ideas for regulation to encourage the diversity of views and investment strategies, mitigating the negative externalities of speculation.

Economic Stimulus and Financial Instability: Recent Case of the U.S. Household

The effectiveness of government policies and economic stimuli during the 2007 financial crisis and the COVID-19 pandemic are compared in this study. While the 2007 financial crisis started in the real estate market and spread through the contagion effect to other sectors, the pandemic halted the all sectors of the global economy simultaneously. In the United States, where the social safety net is not as strong as other advanced economies, the unemployment rate skyrocketed and many families lost income. The federal government countered with various relief packages, which have been, unlike the rounds of quantitative easing prevalent after the 2007 financial crisis, direct payments to households and businesses. The Agent Instability Indicator and default elasticity coefficient are used to quantitatively assess the financial instability and default risk of subgroups of United States households classified by percentile of income and net worth. It turns out that the financial instability level of the United States household during the pandemic has not been as high as that during the 2007 crisis and the Great Recession. It is concluded that the direct handout of cash-so called helicopter money-is more effective at preventing financial collapse and stabilizing the economy than quantitative easing through asset purchase.

Financial Instability and Delays in Access to Sexual and Reproductive Health Care Due to COVID-19.

Objective: To identify prevalence of, and patient and clinic characteristics associated with, delays in access to sexual and reproductive health (SRH) care due to the COVID-19 pandemic across three states with varying COVID-19 context and state government response. Methods: We weighted data collected between May 2020 and May 2021 from monthly and biannual follow-up surveys of patients seeking family planning care at a publicly supported health center in Arizona (N = 538), Iowa (N = 341), and Wisconsin (N = 568), who reported on experiences 6-18 months before the survey. We conducted multivariable logistic regression analyses to identify characteristics associated with delays in accessing SRH care due to COVID-19, with specific attention to associations between patients' financial instability and experiencing delays. Results: Between May 2020 and May 2021, over half of respondents in Arizona (57%), 38% in Iowa, and 30% in Wisconsin indicated that they were either unable to access or delayed accessing SRH care or a contraceptive method due to the COVID-19 pandemic. In Arizona and Wisconsin, in multivariable models, respondents who had experienced financial instability due to being out of work, having fallen behind on key life payments, or because of a job reduction or loss due to COVID-19 had increased odds of experiencing COVID-19-related SRH care delays (Arizona adjusted odds ratio [aOR] = 2.6, p = 0.01 and Wisconsin aOR = 6.0, p < 0.001). Conclusions: Access to contraception was curtailed during the COVID-19 pandemic, especially for those who experienced employment and financial instability. Individuals' and clinics' ability to mitigate these effects were likely dependent on state context and response to the pandemic, among other factors.

The Indian Banking System, Financial Fragility, and Deregulation

Indian banking has undergone structural changes from financial reform and the process of deregulation during the 1990s. Added to this is a new element, the COVID-19 pandemic, and its effects on the banking system. The categories of concentration and centralization of capital and the increasing instability of banking institutions will enable an assessment of banking fragility as well as the impact and repercussions of the pandemic. The economic fragility of India's banking system has been a constant over the past few decades. The objective of this article is to analyze the profitability of the banking system, the banks' non-performing loans and the government's strategy to prevent a banking crisis.

Time-frequency domain analysis of investor fear and expectations in stock markets of BRIC economies.

The purpose of this study is to provide insight into the lead-lag relationships between the BRIC stock index and its constituents. In addition, we assess the comovements between the US volatility index (VIX) as a measure of investor uncertainty and fear and stock returns of BRIC economies. Therefore, the bi-wavelet and wavelet multiple correlations approaches are utilised. Findings from the bi-wavelet technique indicate that there are high interdependencies between the BRIC index and its constituents throughout the time-frequency domain. In addition, comovements between the BRIC index and its constituents was positive and significant. Notwithstanding, we find the BRIC index to be the first variable to respond to shocks when all the study variables were considered in the wavelet multiple cross-correlations. Similarly, the stock market of Brazil is the next to respond to shocks. On the other hand, the stock market of Russia lags in the long-term when the BRIC index was excluded from the wavelet multiple cross-correlations. We also find a uni-directional causality between the VIX and the BRIC stocks in the medium-, and long-terms. Specifically, the US VIX significantly drives the BRIC stocks and considered to be negative. Findings from the study imply that global investors can select any of the stock markets in BRIC to allocate their investments due to their strong interdependencies which may facilitate trade and investments. However, portfolio diversification, safe haven or hedge benefits within this region may be minimal due to their high integration with the BRIC index which demonstrates positive significant comovements. The findings present relevant inferences for portfolio diversification, policy decisions, and risk management schemes. It is recommended that investors hedge against volatilities in the BRIC stock markets using the US VIX.

Educational disruption: Impact of COVID-19 on students from the Northeast states of India.

The year 2020 has been plagued with COVID-19 and many sectors such as the manufacturing and services are affected, with the educational sector being one of them. Even though a probable way through online learning is found to continue academic activities, the result and the process may not be successful. This study intends to identify the areas of educational disruption due to the COVID-19 situation. For this purpose, a structured questionnaire is used to collect data from students of various part of the Northeast states of India. The findings from the study revealed that there are many reasons that causes educational disruption in the life of students of north-eastern states of India. Students from the north-eastern states of India have been facing poor network, which leads to poor communication between the teachers and students. Continuous lockdown also causes mental stress to the students. As the tension rises due to the on-going pandemic, insecurity regarding the future plans of students also rises. Owing to financial constraints, students are not able to meet the necessary requirements for effective online learning.