Preprint Article Version 1 This version is not peer-reviewed

COVID-19 in Stock Markets: A Complexity Perspective

Version 1 : Received: 2 May 2020 / Approved: 5 May 2020 / Online: 5 May 2020 (03:26:34 CEST)

How to cite: Pereira, E.J.D.A.L.; Ferreira, P.; Pereira, H.B.D.B. COVID-19 in Stock Markets: A Complexity Perspective. Preprints 2020, 2020050056 (doi: 10.20944/preprints202005.0056.v1). Pereira, E.J.D.A.L.; Ferreira, P.; Pereira, H.B.D.B. COVID-19 in Stock Markets: A Complexity Perspective. Preprints 2020, 2020050056 (doi: 10.20944/preprints202005.0056.v1).

Abstract

This paper aims to analyze the effects of Covid-19 on financial markets from the perspective of Complexity. The Covid-19 pandemic has caused turmoil in financial markets and is already one of the most important financial crises in history, causing a fall in several stock markets as well as great volatility. Unlike past crises, which in most cases were caused either by problems of fiscal deficits or in the financial system, this crisis has its origin in an epidemic disease, which occurred in Wuhan, China, and quickly spread across the globe affecting transport networks, commerce and finance, and will affect the public debt of many countries. This is a systemic situation in which there is a need to consider several interconnected systems, financial instability and high financial risk, something that econophysics and some complexity theorists already do. Therefore, this paper intends to show, theoretically, the systemic and complex character of the recent financial crisis caused by Covid-19.

Subject Areas

complexity; Covid-19; networks; stock markets; power laws

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