Faculty and Research

The crisis in Europe began with a lockdown in Italy’s Lombardy region. It was the starting point of the big falls in the stock markets of Europe, the United States, Japan, and the emerging markets.

The coronavirus pandemic has set in motion a bigger drop the markets than those produced by this century’s other two crashes: September 11, 2001 following the attack on the Twin Towers, and the Lehman Brothers bankruptcy in September 2008. This time, the stock markets have come crashing down just a little more than a month into the coronavirus crisis, dropping an average of 32%. Consider, in contrast, the fact that, over the same period after 9/11, the markets fell by 3.5% on average and in the case of the Lehman Brothers, the fall amounted to around 18%.

Furthermore, in this crisis, the value of gold, the safe-haven asset par excellence, has fallen by around 10% over the last month, while in 2001 it rose by 4.5%.

27 Mar 2020