Links Between Stock Market Indexes and Major Infectious Disease Epidemics Persist Across Three Centuries: A Socionomic Perspective on Stocks, Epidemics and Social Health
48 Pages Posted: 16 Mar 2013 Last revised: 7 May 2018
Date Written: April 27, 2018
For countries in which adequate data are available, one finds that changes in stock market indexes precede corresponding changes in economic performance, which in turn precede corresponding changes in public health. It follows that stock market indexes should be valuable leading indicators of changes in public health. The studies that have considered this relationship found significant links. We seek to test the historical endurance of the relationship. First, we identify temporal, qualitative associations between 15 major infectious disease epidemics and preceding severe and/or extended declines in the stock market indexes of heavily afflicted countries over the 19th, 20th and 21st centuries. Second, we identify a positive statistical association between U.S. stock market performance and the Index of Social Health, which spans four decades. We explore the socionomic explanation for these findings, specifically that natural fluctuations in social mood regulate changes in both stock price trends and public health trends.
Keywords: Epidemics, Infectious disease, Stock market, Social mood, Social health, Socionomic theory
JEL Classification: I1, I10, I12, N2
Suggested Citation: Suggested Citation