Investors' risk attitudes in the pandemic and the stock market: new evidence based on internet searches

Marlene Amstad, Giulio Cornelli, Leonardo Gambacorta and Fan Dora Xia

No 25, BIS Bulletins from Bank for International Settlements

Abstract: The sharp drop and subsequent rebound in global stock markets in the current pandemic focuses attention on changes in investors' risk attitudes. A new Covid-19 risk attitude (CRA) index for 61 markets, based on internet searches in Google and Baidu, does a good job at capturing investors' attitudes toward pandemic-related risks. Stock markets are more sensitive to changes in the CRA index in more financially developed economies. Stock markets are less sensitive in jurisdictions that have restricted mobility less and that have enacted other containment measures against the pandemic.

Pages: 9 pages
Date: 2020-06-26
New Economics Papers: this item is included in nep-rmg
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