Social Learning in Economic Networks: Evidence from COVID-19 [Funder: Carleton University COVID-19 Rapid Research Response Grants]

One of the negative consequences of COVID-19 has been the rapid and sudden decline in the stock market. This decline adds to existing economic, social, and psychological aspects of the pandemic. My research examines the learning process in economic social networks as viewed on social media: How do investors learn about COVID-19? And later, how do they make trades in response to this news? My project will also examine the propagation of this news to investors' networks, identifying hubs and critical nodes in the networks. The research will apply network theory, textual analysis, and statistical techniques to a large dataset of 20 million financial tweets encompassing all publicly-listed North American firms. The goal of this work is two-fold: first, to learn about the proliferation of fear shocks in economic social networks; and second, to inform policy changes, particularly economic policy, in the recovery phase, and in the aftermath of COVID-19.