Investors’ Risk Attitudes in the Pandemic and the Stock Market: New Evidence Based on Internet Searches
BIS Bulletin No. 25 (2020)
9 Pages Posted: 3 Aug 2020
Date Written: June 26, 2020
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.
Keywords: COVID-19, equity market, sentiment, risk attitude
JEL Classification: G15, G01, G02
Suggested Citation: Suggested Citation