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COVID-19 Finance Faculty Media Coverage

Since the beginning of the pandemic, the Yale SOM finance faculty have commented on a number of Covid-19 related topics in the media and have used their research to further contribute to a variety of pressing issues including the stock market, the economy, and federal interventions.

Below is a collection of some of the Yale SOM finance faculty’s work and comments on Covid-19 and the economy.

The Stock Market and The Economy

In March of 2020, the stock market plunged. The subsequent months provided unpredictability in the market’s volatility and uncertain path to recovery. Market predictability became challenging because of several unknown factors including investor anxiety, the toll of the tanking market on retirement savings, rising unemployment numbers, and the time it will take to create a vaccine for the Covid-19 virus.

James Choi
Stefano Giglio
William Goetzmann
Gary B. Gorton
Roger Ibbotson
Tobias J. Moskowitz
Geert Rouwenhorst
Robert Shiller

November 30, 2020 – Project Syndicate: Many have been puzzled that the world’s stock markets haven’t collapsed in the face of the COVID-19 pandemic and the economic downturn it has wrought. But with interest rates low and likely to stay there, equities will continue to look attractive, particularly when compared to bonds. By Robert J. Shiller, Laurence Black, Farouk Jivraj

October 23, 2020 – New York Times: Stocks could well rise despite investor worries, the economist Robert Shiller says, but this is a high-risk moment.

The coronavirus crisis and the November election have driven fears of a major market crash to the highest levels in many years.

At the same time, stocks are trading at very high levels. That volatile combination doesn’t mean that a crash will occur, but it suggests that the risk of one is relatively high. This is a time to be careful.

October 22, 2020 – Yale Insights: Despite a general wave of pessimism following the COVID-19 stock crash in March, few investors made significant changes to their portfolios, according to new research from Yale SOM’s Stefano Giglio. Most predict the economy will recover in the long term—but fear more trouble is likely in the short term.

March 18, 2020 – Yale Insights: The S&P 500 has fallen by more than 30% as the markets react to the COVID-19 crisis. We asked Yale SOM’s James Choi, who has examined the implications of academic research for personal finance, what studies say about how to respond to a market crash.

April 28, 2020 – Yale Insights: The COVID-19 outbreak is a chapter in history we’re only just beginning to chronicle. We asked Yale SOM’s Robert Shiller, whose latest book is Narrative Economics, to tell us what collective stories are forming around the pandemic and what they might mean for our economic future.

Richard Drew / Associated Press

March 12, 2020 – Connecticut Public Radio: The dizzying plunge in stock market values in recent days, as the coronavirus crisis has intensified, has the business world on edge. William Goetzmann, professor of finance at the Yale School of Management and stock market historian, spoke with Connecticut Public Radio’s All Things Considered to put the recent volatility into perspective.

Photo: Shutterstock

March 18, 2020 – Freakonomics: In just a few weeks, the novel coronavirus has undone a century’s worth of our economic and social habits. What consequences will this have on our future — and is there a silver lining in this very black pandemic cloud?

The fact is, there are a lot of things flying under the radar right now, a lot of consequences that may come out of the global response to Covid-19. So we thought we’d call a few economists whose past research indicates they might have some insights into the future that’s being crafted right now by the extraordinary changes we’re all living through.

Putting Things Into Historical Perspective

If the saying, “history repeats itself,” is true, then financial history could give some sort of insight into the Covid-19 stock market volatility we are experiencing. Although there are currently many unknown variables, similar situations such as the 1918 Spanish Flu Pandemic and South Sea Bubble of 1720 provide insight into how investors reacted to an economic downturn and how the market recovered. Behavioral economics and behavioral finance also play a role here in examining investor behavior after previous crashes.

Popperfoto via Getty Images

March 23, 2020 – Yale Insights:

The stock markets are reeling as fear and uncertainty about the global pandemic grow. We asked Yale SOM’s William Goetzmann, whose research includes financial history, to put the volatility into historical perspective.

April 3, 2020 – PBS: The spread of COVID-19 has shaken financial markets and led to layoffs across the country. Over 3 million Americans have filed for unemployment. Stocks have suffered major losses unrivaled since 2008 and the Dow has seen its worst decline since 1987 - the year of the Black Monday stock market crash. Tonight, we put your financial fears into historical perspective.

Federal Interventions

During the pandemic, it became clear that the federal government needed to intervene and find ways to help save the economy. The federal government worked to provide stimulus packages to the American people while the Federal Reserve rolled out a “Main Street” lending program to help keep businesses afloat.

William English:

Andrew Metrick:
Photo: Andrew Harrer/Bloomberg via Getty Images

November 20, 2020 – Yale Insights: This week, Treasury Secretary Steven Mnuchin requested that the Federal Reserve return unused funds for four emergency lending programs, effectively shutting them down at the end of the year. Prof. Andrew Metrick, director of the Yale Program on Financial Stability, says the programs are an insurance policy that may be badly needed in 2021.

Photo: Alexi Rosenfeld/Getty Images

August 31, 2020 – Yale Insights:

Since COVID-19 convulsed the global economy earlier this year, Prof. Andrew Metrick and his team at the Yale Program on Financial Stability have been tracking government efforts to provide stimulus, prevent job losses, and keep markets from melting down. Metrick says that fighting a crisis is different from economic policymaking in normal times; governments need to be exceptionally generous and not get bogged down in stringent processes that keep money from getting to those in need. He also describes how efforts to ease the economic downturn have created new and burgeoning risks within the financial system.

Noam Galai/Getty Images

July 28, 2020 – Yale Insights:

The Main Street Lending Program is intended to encourage banks to lend to midsize businesses by lowering their risk, but few have taken advantage of it. Yale SOM’s William English explains how the program fits into the array of federal stimulus efforts and offers proposals for making it work better.

May 4, 2020 – Yale Insights:

In an online event hosted by the Bank for International Settlement, Andrew Metrick, director of the Yale Program on Financial Stability, discussed the actions that governments have already taken to prevent the COVID-19 pandemic from sparking a full-blown financial crisis, and the challenges still to come.

Record Unemployment Insurance Claims

At the beginning of the Covid-19 pandemic, Professor Paul Goldsmith-Pinkham worked with his co-authors to predict weekly unemployment insurance claims. Based on a model they built using Google trends, they have came incredibly close each week! Read more about their research and press coverage.

Photo: Joe Raedle/Getty Images

March 30, 2020 – Yale Insights:

A greater share of Americans filed for unemployment insurance in the week ending March 21 than in any prior week in American history, according to Yale SOM’s Paul Goldsmith-Pinkham and labor economist Aaron Sojourner YC ’95. We asked Goldsmith-Pinkham for his perspective on this alarming statistic and its implications for people and policy in the United States.

Covid-19 Preventative Measures and Business Restrictions

Around the world, countries struggled with effectively communicating COVID-19 preventative measures to its residents to help curb the spread of the coronavirus. It was imperative to make sure that the correct health and safety information was being disseminated properly, especially to those in hard to reach areas. Moreover, elected officials also grappled with determining which business and related restrictions could help prevent the spread of COVID-19 and reduce fatalities while taking into consideration the various effects that each closure would cause.

Paul Goldsmith-Pinkham
Matthew Spiegel
Heather Tookes
Photo: Alexi Rosenfeld/Getty Images

November 23, 2020 – Yale Insights: New research from Yale SOM’s Heather Tookes and Matthew Spiegel, using what they believe is the most comprehensive database of U.S. business interventions yet created, finds that mask mandates, closing restaurants, and stay-at-home orders are all effective at saving lives. Other commonly used measures, including closing low-risk businesses, can actually worsen the spread of the pandemic.

Example of data available to view. Business and related COVID-19 restrictions for Connecticut, New Haven County.

Professors Matthew Spiegel and Heather Tookes have collaborated on a new working paper titled, “Business Restrictions and COVID Fatalities.” To accompany this paper, they have released a state and county policy look-up tool. This includes the history of state and county-level business and related Covid-19 restrictions for all counties in the U.S. since March. It contains the most comprehensive historical data on U.S. county-level policies that they are aware of.

December 9, 2020 – The Connecticut Mirror hosted a conversation with three Connecticut-based health and finance experts on COVID-19's resurgence.

The Future of Real Estate

Throughout the pandemic, many Americans have worried about being able to make their rent and mortgage payments during a time of economic hardship and uncertainty. This also prompted people to wonder about the post-Covid-19 real estate market. Will people permanently move away from densely populated cities and into the suburbs as working from home becomes the new norm?

Photo illustration by Michael Waraksa

July 31, 2020 – New York Times: Suburbs and fashionable exurbs are hot, but don’t forget that home prices have fallen before, a Nobel laureate (Robert Shiller) warns.

July 7, 2020 – Bloomberg: Robert Shiller, Yale University professor of economics, talks about the lasting impact of the coronavirus on the housing market. He appears on "What'd You Miss?"

June 12, 2020 – Barron’s Streetwise with Jack Hough podcast: Yale economist Robert Shiller and the CEOs of broker Redfin and homebuilder Taylor Morrison give their opinion about whether home buyers are heading to the suburbs.

Killer Acquisitions

Professor Song Ma and his co-authors have defined the term “killer acquisitions” to mean the act of companies acquiring competitors with the sole purpose of shutting them down. These companies want to swiftly end competitor innovation which would threaten their control over the market. During the Covid-19 crisis, examples of “killer acquisitions” came to light when there was high demand for ventilators and major difficulty obtaining them.

Photo: Uwe Anspach/picture alliance via Getty Images

April 2, 2020 – Yale Insights:

Research by Yale SOM’s Florian Ederer and Song Ma has shown that companies often purchase competitors, not to acquire their ideas and products, but to shut them down—a phenomenon that they have dubbed “killer acquisitions.” We asked them to shed light on a recent report raising questions about whether such an acquisition may be partially responsible for a shortage of ventilators in the United States.

Sporting Events

The implications of suspending live sporting events and restricting crowds will have an impact on the economy as well as on the sport itself. Sporting events are a major source of entertainment and revenue worldwide but with the possibility of playing in front of empty stands, Professor Tobias Moskowitz has found that referees may actually make better calls.

Brendan Lynch/Globe Staff Illustration

May 24, 2020 – The Boston Globe: Tobias Moskowitz, an economist and Yale professor of finance, co-authored “Scorecasting: The Hidden Influences Behind How Sports Are Played and Games Are Won.” Among other topics, Moskowitz studied the influence home-court advantage has on a game’s outcomes. He looked at variables such as fan support, travel, and familiarity with venues.

Clippers guard Patrick Beverley chats with referee Rodney Mott. Photo: Chris Carlson/Associated Press

April 23, 2020 – The Wall Street Journal: Games behind closed doors will be bizarre. But economists believe referees will make better calls when they don’t have people screaming at them.

The Art World

Nothing is business as usual since the Covid-19 pandemic forced many businesses to shut their doors to the public. Businesses had to think outside of the box in order to survive and the art world was no exception. Many musesums, galleries and art fairs found creative ways to virtually maintain engagement with their patrons while also catching the eye of new art enthusiasts.

Visitors at the Whitney Museum of American Art in New York City in September 2020. Photo: Jeenah Moon/Bloomberg via Getty Images.

October 15, 2020 – Yale Insights: COVID created a crisis for the art world when museums, galleries, and art fairs were closed down. In an online discussion led by Prof. William Goetzmann, leaders in the field discussed the state of art institutions and the reasons for hope about the long term.

Teaching Remotely

The Yale finance faculty had to suddenly adapt to online teaching in March of 2020 and acted quickly to learn how to effectively use Zoom for everyday teaching. At the end of the semester, faculty then reflected upon what worked and what can be improved for future online teaching.

Nicholas Barberis

Paul Goldsmith-Pinkham

[WATCH] May 15, 2020 – Paul Goldsmith-Pinkham on the benefit of polling in class.