Are Stringent Containment and Closure Policies Associated with a Lower COVID-19 Spread Rate? Global Evidence

Stringent government policies, in general, and strict containment and closure policies in particular including workplace closing, restrictions on gatherings, close of public transport, stay-at-home order, restrictions on internal movement, and international travel control are associated with a lower spread rate of COVID-19 cases. On the other hand, school closures and public event cancellations have not been found to be associated with lower COVID-19 spread. Restrictions on international travel and the closing of public transport are two policies that stand out and have a consistent and slowing effect on the spread of COVID-19. The slowing effect of the containment and closure policies on the spread of COVID-19 becomes stronger one week after the policies have been implemented, consistent with the SARS-CoV-2 transmission pattern and the incubation period evolution. Furthermore, the slowing effect becomes stronger for culturally tight countries and countries with a higher population density. Our findings have important policy implications, implying that governments need to carefully implement containment and closure policies in their own countries’ social and cultural contexts, with an emphasis on the ideas of the common interest, personal responsibility, and the sense of community.

Infected Markets: Novel Coronavirus, Government Interventions, and Stock Return Volatility around the Globe

Do government interventions aimed at curbing the spread of COVID-19 affect stock market volatility? To answer this question, we explore the stringency of policy responses to the novel coronavirus pandemic in 67 countries around the world. We demonstrate that non-pharmaceutical interventions significantly increase equity market volatility. The effect is independent from the role of the coronavirus pandemic itself and is robust to many considerations. Furthermore, two types of actions that are usually applied chronologically particularly early-information campaigns and public event cancellations-are the major contributors to the growth of volatility.