The nCOVID‑19 and fnancial stress in the USA: health is wealth

Abstract

Since its frst report in the USA on 13 January 2020, the novel coronavirus (nCOVID-19) pandemic like in other previous epicentres in India, Brazil, China, Italy, Spain, UK, and France has until now hampered economic activities and fnancial markets. To ofer one of the frst empirical insights into the economic/fnancial efect of the COVID-19 pandemic, especially in the USA, this study utilized the daily frequency data for the period 25 February 2020–30 March 2020. By employing the empirical Markov switching regression approach and the compliments of cointegration techniques, the study establishes a twostate (stable and distressing) fnancial stress situation resulting from the efects of COVID19 daily deaths, COVID-19 daily recovery, and the USA’ economic policy uncertainty. From the result, it is assertive that daily recovery from COVID-19 eases fnancial stress, while the reported daily deaths from COVID-19 further hamper fnancial stress in the country. Moreover, the uncertainty of the USA’ economic policy has also cost the Americans more fnancial stress and other socio-economic challenges. While the cure for COVID-19 remains elusive, as a policy instrument, the USA and similar countries with high severity of COVID-19 causalities may intensify and sustain the concerted eforts targeted at attaining a landmark recovery rate.