Quotation Pagano, Marco, Wagner, Christian, Zechner, Josef. 2020. COVID-19, asset prices, and the Great Reallocation. VoxEU, 11.06.20


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Abstract

Whether COVID-19 will trigger a massive reallocation of capital and labour is a key question for policymakers and investors alike. This column shows that asset markets reveal large cross-sectional differences in the repricing of industries before, during, and after the onset of COVID-19. Firms that are more resilient to social distancing significantly outperformed in the six years before and during the COVID-19 outbreak. Looking into the future, stock options imply that investors require significantly lower returns from more pandemic-resilient firms. Governments would be unwise to ignore these signals, directing public financial resources mainly to prop up ailing low-resilience firms.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Magazine/newspaper article
Language English
Title COVID-19, asset prices, and the Great Reallocation
Title of journal VoxEU
Year 2020
Date June 11, 2020
URL https://voxeu.org/article/covid-19-asset-prices-and-great-reallocation

Associations

People
Wagner, Christian (Details)
Zechner, Josef (Details)
External
Pagano, Marco (University of Naples Federico II, Italy)
Organization
Institute for Finance, Banking and Insurance IN (Details)
Research areas (Ă–STAT Classification 'Statistik Austria')
5361 Financial management (Details)
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