What threatens stock markets more - The coronavirus or the hype around it?
INTERNATIONAL REVIEW OF ECONOMICS & FINANCE 2022. [PMCID:
PMC8741485 DOI:
10.1016/j.iref.2021.12.007]
[Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Subscribe] [Scholar Register] [Indexed: 05/09/2023]
Abstract
We use a linear regularized model with structural changes and found that the coronavirus pandemic had a direct and an indirect effect (via media hype) on stock markets. We reveal a correlation between internet search queries, discussions of the pandemic in the press and social media, and changes in stock market indices. We demonstrated that the effect of the pandemic coverage in digital and printed media and the effect of Google queries was comparable to, and sometimes even exceeded, the effect of the pandemic itself. We showed the effect of hype on the volume of Google queries and social media publications.
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