The nCOVID-19 and financial stress in the USA : health is wealth
Peer reviewed, Journal article
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Original versionAlola, A. A., Alola, U. V. & Sarkodie, S. A. (2020). The nCOVID-19 and financial stress in the USA: health is wealth. Environment, Development and Sustainability. doi: 10.1007/s10668-020-01029-w
Since its first report in the USA on 13 January 2020, the novel coronavirus (nCOVID-19) pandemic like in other previous epicentres in India, Brazil, China, Italy, Spain, UK, and France has until now hampered economic activities and financial markets. To offer one of the first empirical insights into the economic/financial effect of the COVID-19 pandemic, especially in the USA, this study utilized the daily frequency data for the period 25 February 2020–30 March 2020. By employing the empirical Markov switching regression approach and the compliments of cointegration techniques, the study establishes a two-state (stable and distressing) financial stress situation resulting from the effects of COVID-19 daily deaths, COVID-19 daily recovery, and the USA’ economic policy uncertainty. From the result, it is assertive that daily recovery from COVID-19 eases financial stress, while the reported daily deaths from COVID-19 further hamper financial stress in the country. Moreover, the uncertainty of the USA’ economic policy has also cost the Americans more financial stress and other socio-economic challenges. While the cure for COVID-19 remains elusive, as a policy instrument, the USA and similar countries with high severity of COVID-19 causalities may intensify and sustain the concerted efforts targeted at attaining a landmark recovery rate.