Table 2.

Changes in beliefs about expected probability of a crash, by initial beliefs

The table shows the transition density between the level of ex ante expectations about perceived probability of the stock market return over the coming year being lower than −30% (rows) and ex post changes in these expectations (columns), focusing on the transition between February 2020 and March 2020 and the transition between February 2020 and April 2020. The interior buckets in both rows and columns are closed on the left and open on the right; ppt, percentage points. Darker shaded areas are those containing more of the transition mass.