Health risk and the efficient market hypothesis in the time of COVID-19

Document Type

Article

Source of Publication

International Review of Applied Economics

Publication Date

1-1-2020

Abstract

© 2020 Informa UK Limited, trading as Taylor & Francis Group. In this note, we show that the stock markets do not always incorporate all the available information because in many cases they slowly evaluate the news. Using simple statistical analysis, we show that the response of the markets to the available information in certain time periods is irrational and inefficient. The COVID-19 outbreak gives financial economists an example of health risk underestimation, and of an unexpectedly slow response during a stress period; issues that should be examined in the future under a behavioral view.

ISSN

0269-2171

Publisher

Informa UK Limited

Last Page

14

Disciplines

Business

Keywords

behavioral finance, COVID-19 risk underestimation, efficient market hypothesis, Health risk, rationality

Scopus ID

85098565099

Indexed in Scopus

yes

Open Access

yes

Open Access Type

Bronze: This publication is openly available on the publisher’s website but without an open license

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