Impact of Capital Account Liberalization on Stock Market Crashes

2019 ◽  
Author(s):  
Rizwan Khalid ◽  
Choudhry Tanveer Tanveer Shehzad ◽  
Bushra Naqvi
Keyword(s):  
Stock Market ◽  
Capital Account ◽  
Capital Account Liberalization ◽  
Market Crashes

Rational Panics and Stock Market Crashes

1999 ◽  
Author(s):  
Pietro Veronesi ◽  
Gadi Barlevy
Keyword(s):  
Stock Market ◽  
Market Crashes

scholarly journals Market shocks and professionals' investment behavior – Evidence from the COVID-19 crash

2020 ◽  
Author(s):  
Christoph Huber ◽  
Juergen Huber ◽  
Michael Kirchler
Keyword(s):  
Stock Market ◽  
Risk Aversion ◽  
Risk Taking ◽  
Investment Behavior ◽  
Controlled Experiments ◽  
Price Expectations ◽  
Market Crashes ◽  
Changes In Risk ◽  
Risk Taking Behavior ◽  
Market Shocks

We investigate how the experience of stock market shocks, such as the COVID-19 crash, influences risk-taking behavior. To isolate changes in risk taking from other factors during stock market crashes, we ran controlled experiments with finance professionals in December 2019 and March 2020. We observe that their investments in the experiment were 12 percent lower in March 2020 than in December 2019, although their price expectations had not changed, and although they considered the experimental asset less risky during the crash than before. Thus, lower investments are driven by higher risk aversion, not by changes in beliefs.

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