The Impact of COVID-19 on Financial Markets and the Real Economy

ABSTRACT

Unlike the 2007–2009 economic meltdown, the COVID-19 pandemic was not caused by problematic market situation or reckless financial policy;it was, in fact, completely unpredicted (Hsu and Tang 2022). [...]it contrasted from other earlier dramatic events caused by economic and financial circumstances, including the Asian financial crisis in 1997–1998 or the European debt crisis in 2010–2013 (Dong et al. 2022). [...]the similarity of these downturns is that they commenced in one nation or area and spread rapidly to other markets, prompting considerable disruption in the worldwide financial system (Zhang et al. 2022). [...]COVID-19 has been regarded as an "exogenous shock” or potentially a "black swan”, as it was such a rare occurrence that has major repercussions for stock markets without any reasonable anticipation (Costola et al. 2023). According to Yu and Xiao (2023), the pessimistic news from COVID-19 government restriction policies generated more instability in stock markets than the optimistic news. [...]Conlon and McGee (2020) raised suspicions on Bitcoin's potential to provide protection from volatility in conventional markets. [...]the publications featured in this Special Issue expanded our comprehension surrounding the effect of the COVID-19 pandemic on financial markets and the real economy, and they proposed appealing future research avenues.