Stock Market Stimulus
We study the stock market effects of the arrival of the three rounds of “stimulus checks” to U.S. taxpayers and the single round of direct payments to Hong Kong citizens. The first two rounds of U.S. checks appear to have increased retail buying and share prices of retail-dominated portfolios. The Hong Kong payments increased overall market turnover and share prices in Hong Kong and mainland Chinese markets, especially in large-cap portfolios. We cannot rule out that these price effects were permanent. The findings raise novel questions about the role of fiscal stimulus in the stock market.
We are grateful to Raj Chetty, John Friedman, and Dawn Nettles for sharing data. We thank Valerie Baldinger of the New York Federal Reserve, Nithin Kavi of Harvard College, and especially Cody Wan of NYU for excellent research assistance. We thank seminar participants at Harvard Business School and NYU Stern School of Business for comments. The Division of Research at the Harvard Business School provided research support. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
This document contains a list of professional activities beyond my main employment at Harvard University. Please feel free to contact me with any questions about this disclosure statement.
Outside activities since 2008, paid and unpaid:
Academic Advisory Board, Martingale Asset Management (chairman) Consultant, Martingale Asset Management
AllianceBernstein, research presentation and consultation Capital structure consultation to two non-financial companies Associate Editor, Review of Financial Studies (unpaid) Editor, Review of Financial Studies (2014-present, unpaid)
In 2014, the Brookings Institute paid me an honorarium for the working paper “Government Debt Management at the
Zero Lower Bound”
The Banco Central de Chile paid me an honorarium for the paper “Forward Guidance in the Yield Curve: Short Rates versus Bond Supply.”
No institution had any say on the content of these papers or on what I write.
Paid speeches and executive education:
HBS Investment Management Workshop (various years, since 2008) HBS Finance for Senior Executives (various years, unpaid before 2016) SanfordBernstein Research Conference
Robeco Q-Group Arrowstreet Capital Pyramis
Windham Capital Management
Since September 2015, I have been a voting member on the Harvard University Committee on pensions. I do not do consulting work or make paid presentations to any investment managers employed or being considered by Harvard in this capacity.
As part of my work at Harvard Business School, I regularly write cases about hedge funds, investment managers, and their strategies. I receive no compensation from these managers for writing these cases, and the cases are not meant as endorsements of the managers or their strategies. I receive royalties (currently under $1500 per year) for cases I have written while employed at Harvard.