Review of Financial Studies Vol. 36 No. 10 2023

Stock Market Stimulus

Robin Greenwood¹; Toomas Laarits²; Jeffrey Wurgler³

¹ Harvard Business School and NBER , USA · ² NYU Stern School of Business , USA · ³ NYU Stern School of Business and NBER , USA

Abstract

We study the stock market effects of the arrival of the three rounds of “stimulus checks” to U.S. taxpayers and the single round of direct payments to Hong Kong citizens. The first two rounds of U.S. checks appear to have increased retail buying and share prices of retail-dominated portfolios. The Hong Kong payments increased overall turnover and share prices on the Hong Kong Stock Exchange. We cannot rule out that these price effects were permanent. The findings raise novel questions about the role of fiscal stimulus in the stock market.

DOI

10.1093/rfs/hhad025

Volume

36

Issue

10

Pages

4082-4112

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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