Crises and other big events

I am co-founder and co-lead of the UZH Center for Crisis Competence.

The stock market generally can ask as a crystal ball. It tells us something about the post-COVID-19 world, about what to expect for climate policy after the Russia-Ukraine war, about what investors expect regarding environmental policy after the Trump and Biden elections, as shown here, here, and here. The Trump election is also a very interesting case study for how stock prices converge to a new equilibrium after a major shock.

Do institutional investors stabilize equity markets in crisis periods? The short answer from our study of the COVID-19 market crash is: No. But long-term institutional investors anticipated that the slow-down of climate policy after the surprising election of Donald Trump was temporary, and they bet on a boomerang in climate policy.

Having enough cash and low leverage is essential for corporate crisis resilience, as seen in the COVID-19 crash. (If interested in an analysis in German, with a Swiss focus, see here.)

The financial crisis of 2007/2008 had very long-lasting effects – and in regions and countries that suffered more, the death count in COVID-19 was worse, arguably because of a worsened public health care.