TY - BOOK ID - 134204520 TI - Hang in There: Stock Market Reactions to Withdrawals of COVID-19 Stimulus Measures AU - Chan-Lau, Jorge. AU - Zhao, Yunhui. PY - 2020 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Business and Economics KW - Macroeconomics KW - Economics: General KW - International Economics KW - Monetary Policy KW - General Financial Markets: Government Policy and Regulation KW - Corporate Finance and Governance: Government Policy and Regulation KW - Economic & financial crises & disasters KW - Economics of specific sectors KW - Financial crises KW - Economic sectors KW - Currency crises KW - Informal sector KW - Economics UR - https://www.unicat.be/uniCat?func=search&query=sysid:134204520 AB - The COVID-19 pandemic prompted unprecedented economic stimulus worldwide. We empirically examine the impact of a withdrawal of fiscal stimulus policies on the stock markets. After constructing a database of withdrawal events, we use event study analysis and cross-country regressions to assess the difference between the pre- and post-event stock price returns. We find that markets react negatively to premature withdrawals—defined as withdrawals at a time when the daily COVID cases are high relative to their historical average—likely reflecting concerns about the withdrawal impact on the prospects for economic recovery. The design of a successful exit strategy from COVID-19 policy responses should account for these concerns. ER -