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This paper investigates the divergence in investor behaviour between the United States and China following the abolition of the Chinese presidential term limit in 2018, which may, in part, have reflected the heterogeneous opinions expressed in public online media regarding this event. Compared with Chinese investors, the sentiment among US investors was considerably more pessimistic. Accordingly, we find that Chinese companies listed in the United States significantly underperformed relative to a sample of propensity score‐matched firms listed in China. Additionally, we find that the political connectedness of firms to the Chinese government strongly influenced the stock prices of US‐listed Chinese firms. [ABSTRACT FROM AUTHOR]

Expansionary monetary policy is necessary to respond to financial crises. However, if Central Bank asset purchase initiatives are too large or last too long, they can lead to explosive increases in asset prices which add to the risk of a future crisis. This article employs two models including the Campbell-Shiller and Generalized Supremum Augmented Dickey Fuller techniques to search for bubbles in the US equity, housing and bond markets over the past eight years. Although, we find that prices in equities and housing have risen following Federal Reserve intervention, there is little indication of asset price bubbles. There is evidence of explosive bond price increases from September of 2011 to February of 2013. [ABSTRACT FROM AUTHOR]

In the post-global financial crisis period, the central banks of the advanced economies pursued unconventional monetary policies, such as the United States (U.S.) Federal Reserve’s quantitative easing (QE). Those policies and their unwinding may significantly affect cross-border capital flows and thus destabilize the financial systems of emerging markets. For example, emerging markets experienced substantial financial instability during the taper tantrum triggered by U.S. Federal Reserve Chairman Ben Bernanke’s May 2013 announcement of the potential unwinding of QE. In this article, we examine the spillovers from the taper tantrum on emerging markets more rigorously by using econometric analysis to empirically assess the effect on equity markets in emerging markets. Our central finding that virtually all emerging-market equity markets were affected by the taper tantrum highlights the need for emerging-market authorities to remain vigilant about the effects of advanced-economy monetary policies on their financial stability. [ABSTRACT FROM AUTHOR]

Abstract: The adaptive expectations model posits that economic agents’ expectations adjust by constant proportion of previous discrepancy and the forecast for the following period is the same for all the subsequent future periods, if the expectation is a permanent. We apply this hypothesis and event study methodology to examine the impact of five terrorist attacks (New York World Trade Centre, Bali, Madrid, London, and Mumbai) on Japanese industries. Being a watershed event, the negative impact of the attacks in the U.S. was apparent. Our evidence suggests an initial step-change in risk incorporated into expectations after the U.S., Bali and Madrid bombings. The two subsequent attacks had no effect on the market implying no the forecast error in risk expectation in Japan after the initial terrorist attacks. [Copyright &y& Elsevier]