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A Financial Crisis Study: How Fiscal And Monetary Policy Affects The Stock Market Returns Considering The Specific Counties

Cheng, Chen LU and Sun, Minghong LU (2013) NEKP02 20131
Department of Economics
Abstract
This paper measures the impacts of fiscal and monetary policy adjustments on stock markets in U.S., Sweden, and China, during the financial crisis of 2007-2009. The purpose of this paper is to gauge the direction and magnitude of stock market responses to the policy announcements and compare the effects of policies across these three countries. A four-year period prior to financial crisis is selected as benchmark phase to contrast the impact during crisis. The event study methodology is conducted to this investigation. Our results indicate that when facing the crisis, policy adjustments lead to diversified response among different countries. It depends on the features of a country such as the scale of economy, the degree of economic... (More)
This paper measures the impacts of fiscal and monetary policy adjustments on stock markets in U.S., Sweden, and China, during the financial crisis of 2007-2009. The purpose of this paper is to gauge the direction and magnitude of stock market responses to the policy announcements and compare the effects of policies across these three countries. A four-year period prior to financial crisis is selected as benchmark phase to contrast the impact during crisis. The event study methodology is conducted to this investigation. Our results indicate that when facing the crisis, policy adjustments lead to diversified response among different countries. It depends on the features of a country such as the scale of economy, the degree of economic freedom, and vise versa determinates the country’s the preference on policy instruments. (Less)
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author
Cheng, Chen LU and Sun, Minghong LU
supervisor
organization
course
NEKP02 20131
year
type
H2 - Master's Degree (Two Years)
subject
keywords
fiscal policy, monetary policy, stock return, event study, the U.S., Sweden, China
language
English
id
3806824
date added to LUP
2013-06-13 10:19:00
date last changed
2013-06-13 10:19:00
@misc{3806824,
  abstract     = {This paper measures the impacts of fiscal and monetary policy adjustments on stock markets in U.S., Sweden, and China, during the financial crisis of 2007-2009. The purpose of this paper is to gauge the direction and magnitude of stock market responses to the policy announcements and compare the effects of policies across these three countries. A four-year period prior to financial crisis is selected as benchmark phase to contrast the impact during crisis. The event study methodology is conducted to this investigation. Our results indicate that when facing the crisis, policy adjustments lead to diversified response among different countries. It depends on the features of a country such as the scale of economy, the degree of economic freedom, and vise versa determinates the country’s the preference on policy instruments.},
  author       = {Cheng, Chen and Sun, Minghong},
  keyword      = {fiscal policy,monetary policy,stock return,event study,the U.S.,Sweden,China},
  language     = {eng},
  note         = {Student Paper},
  title        = {A Financial Crisis Study: How Fiscal And Monetary Policy Affects The Stock Market Returns Considering The Specific Counties},
  year         = {2013},
}