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The meltdown of the Chinese equity market in the summer of 2015

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  • Liu, Dehong
  • Gu, Hongmei
  • Xing, Tiancai

Abstract

We study the Chinese stock market crash of 2015. We find that Chinese investors overreact to the government policies that may boost the stock market. This overreaction creates the equity bubble and eventually results in the stock market crash. We also find that fiscal policies excite the equity market more than monetary policies.

Suggested Citation

  • Liu, Dehong & Gu, Hongmei & Xing, Tiancai, 2016. "The meltdown of the Chinese equity market in the summer of 2015," International Review of Economics & Finance, Elsevier, vol. 45(C), pages 504-517.
    • Handle: RePEc:eee:reveco:v:45:y:2016:i:c:p:504-517
    DOI: 10.1016/j.iref.2016.07.011
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    Keywords

    Equity mispricing; Equity risk premium;

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