The relationship between the government's non-medicinal interventions during the period of the spread of the Covid-19 virus and the Iran stock market: The role of public vaccination

Document Type : Research Article


1 university of Mazandaran

2 university of Mazandarn

3 M.Sc. student in Economics Student, Iran University Science and Technology.



Following the spread of the Covid-19 virus at the end of 2019, governments have used a series of strict policies and non-pharmacological interventions (NPI) such as social distancing and mandatory quarantines to deal with the increasing spread of this virus, and therefore the trading process of global markets, Including the stock market, it was severely affected. In the following, the start of public vaccination affected various industries and groups and led to changes in stock market transactions of countries, including the Tehran Stock Exchange. The present study, by applying the Smooth transmission regression (STR) nonlinear model and daily data during the period of the Covid-19 epidemic (30 February 2018 to 10 January 2018), investigates the role of public vaccination in the relationship between the interventionist policies of the government and the stock market.In the present study, relying on tests to detect nonlinear behavior, the existence of a nonlinear relationship between government interventions and the stock market index was confirmed, the variable of the number of vaccinated people was selected as a suitable transition variable, and the nonlinear smooth transition regression model with a two-regime logistic transfer function With one transfer (LSTR1) was considered as the proposed model for this relationship. The results of the estimation of the research model show that the increase of strict measures of the government in the form of a two-regime structure with a threshold level of 20857, the number of vaccinated people in the first regime (that is, when the number of vaccinated people is less than the threshold value (20857)) had a positive and significant effect on the stock market index, but after crossing the threshold level and entering the second regime (that is, when the number of vaccinated people is greater than its threshold value (20857)), the mentioned variable had a negative and significant impact on the stock market index.


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