What is Economic Policy Uncertainty (EPU) Index

This chapter analyzes the economic impact of COVID-19 on the tourism sector in Turkey. Stock markets are a barometer for the economy and reflect the pandemic's direct financial impact on tourism companies. The BIST Tourism Index return volatility during 2020 is modelled considering the effects of global economic policy uncertainty, economic sentiment, daily new cases, and Turkey's containment and health index. The index return volatility is high during the pandemic. The results show a statistically significant interrelation between economic sentiment, new cases, and containment and health index, and the BIST Tourism index return volatility. Policies that slow down the virus spread and fiscal support may improve consumer and investor sentiment. The revival of confidence would strengthen the financial markets and decrease volatility.