Economics and Stock Market Question
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For Topic 14’s required reading, we have two sources to look at:
- “The economy is in free fall. So why isn’t the stock market? (Links to an external site.)” by Emily Stewart
- “The stock market is not the economy (Links to an external site.)” by Daisy Palacios and Kai Ryssdal (podcast and article)
The first is specific to the recession induced by the COVID-19 pandemic, and the second is a general explainer. In both cases, we’re trying to understand a really important idea: the stock market is not the same thing as the economy!
In around 300-500 words, please address the following questions:
1. What stood out to you as the most compelling reasons why the stock market is not the same as the economy? Are there reasons why a “good” stock market could coincide with an “bad” economy, or vice versa? Try to connect this to the kind of things we’ve studied in our course.
2. The Emily Stewart article was published in early May of 2020. Do you think much has changed since then to change the situation described in the article?
3. What in your opinion would have to change in order for the stock market to be more representative of the economy than it currently is?
