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The nCOVID-19 and financial stress in the USA: health is wealth

Author

Listed:
  • Andrew Adewale Alola

    (Istanbul Gelisim University
    South Ural State University)

  • Uju Violet Alola

    (Istanbul Gelisim University
    South Ural State University)

  • Samuel Asumadu Sarkodie

    (Nord University Business School (HHN))

Abstract

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.

Suggested Citation

  • Andrew Adewale Alola & Uju Violet Alola & Samuel Asumadu Sarkodie, 2021. "The nCOVID-19 and financial stress in the USA: health is wealth," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(6), pages 9367-9378, June.
    • Handle: RePEc:spr:endesu:v:23:y:2021:i:6:d:10.1007_s10668-020-01029-w
    DOI: 10.1007/s10668-020-01029-w
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    References listed on IDEAS

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    Cited by:

    1. Muhammad Zubair Chishti, 2023. "COVID-19 and FDI nexus in Pakistan: fresh evidence from QARDL and time-varying casualty techniques," Future Business Journal, Springer, vol. 9(1), pages 1-18, December.

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    More about this item

    Keywords

    COVID-19 pandemic; Daily deaths; Daily recoveries; Economic uncertainty; Financial stress; USA;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • I1 - Health, Education, and Welfare - - Health
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development

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