Balancing Public Health and Market Confidence: The Dual Impact of COVID-19 Policies on Financial Markets
Keywords:
COVID-19, Financial Markets, Public Health Policy, Economic Stimulus, Investor Confidence, Stock Market, Government Intervention, Event Study, Pandemic Response, Policy CoordinationAbstract
The COVID-19 pandemic compelled governments worldwide to implement a mix of public health and economic policies to mitigate both viral transmission and financial instability. This study explores the dual impact of these interventions on financial markets, focusing on how lockdowns, social distancing mandates, fiscal stimulus, and monetary easing shaped investor behavior and stock market performance. Using an event study methodology across major economies, the paper reveals that while public health measures initially triggered negative market reactions due to anticipated economic slowdowns, timely and sizable economic stimulus packages helped restore investor confidence. The findings underscore the importance of coordinated and transparent policymaking in crisis management and market stabilization.
