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Debt Matters

Conradson, Viktor LU and Lundell, Marcus LU (2025) NEKN01 20251
Department of Economics
Abstract
This paper explores whether public debt and associated media coverage affect stock market volatility in Sweden, the United States and the United Kingdom. Using monthly data from January 2004 to March 2025, GARCH(1, 1) models with explanatory variables are estimated to test two hypotheses derived from earlier research. One finding indicates that an increase in public debt reduces stock market volatility in Sweden, suggesting that Sweden has the fiscal space to increase its public debt. Another finding indicates that an increase in media coverage increases stock market volatility in the United Kingdom, likely due to recent political uncertainties such as Brexit. By shedding light on this question, our study contributes to a deeper... (More)
This paper explores whether public debt and associated media coverage affect stock market volatility in Sweden, the United States and the United Kingdom. Using monthly data from January 2004 to March 2025, GARCH(1, 1) models with explanatory variables are estimated to test two hypotheses derived from earlier research. One finding indicates that an increase in public debt reduces stock market volatility in Sweden, suggesting that Sweden has the fiscal space to increase its public debt. Another finding indicates that an increase in media coverage increases stock market volatility in the United Kingdom, likely due to recent political uncertainties such as Brexit. By shedding light on this question, our study contributes to a deeper understanding of the relationship between public debt and its media coverage, and stock market volatility. (Less)
Please use this url to cite or link to this publication:
author
Conradson, Viktor LU and Lundell, Marcus LU
supervisor
organization
alternative title
Debt Matters - A study on how public debt and associated media coverage influence stock market volatility in Sweden, the United States and the United Kingdom
course
NEKN01 20251
year
type
H1 - Master's Degree (One Year)
subject
keywords
Public debt, government debt, stock market volatility, media coverage, news, GARCH, fiscal policy, Sweden, United States, United Kingdom
language
English
id
9194355
date added to LUP
2025-09-12 09:58:37
date last changed
2025-09-12 09:58:37
@misc{9194355,
  abstract     = {{This paper explores whether public debt and associated media coverage affect stock market volatility in Sweden, the United States and the United Kingdom. Using monthly data from January 2004 to March 2025, GARCH(1, 1) models with explanatory variables are estimated to test two hypotheses derived from earlier research. One finding indicates that an increase in public debt reduces stock market volatility in Sweden, suggesting that Sweden has the fiscal space to increase its public debt. Another finding indicates that an increase in media coverage increases stock market volatility in the United Kingdom, likely due to recent political uncertainties such as Brexit. By shedding light on this question, our study contributes to a deeper understanding of the relationship between public debt and its media coverage, and stock market volatility.}},
  author       = {{Conradson, Viktor and Lundell, Marcus}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Debt Matters}},
  year         = {{2025}},
}