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Dynamics and asymmetries between consumer sentiment and consumption in pre- and during-COVID-19 time: Evidence from the US

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  • Abosedra, Salah
  • Laopodis, Nikiforos T.
  • Fakih, Ali

Abstract

We study the dynamic relationships between consumer expenditures and consumer sentiment in the pre- and during the COVID-19 periods. Our results indicate that sentiment is closely related to consumption as consumers seem to maintain a long memory of the impact of sentiment during the period of the pandemic relative to the pre-pandemic period. We also found asymmetric behavior of consumption growth with and without the influence of sentiment during each sub-period. We offer some specific policy implications that are beneficial to the US economy and other countries.

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  • Abosedra, Salah & Laopodis, Nikiforos T. & Fakih, Ali, 2021. "Dynamics and asymmetries between consumer sentiment and consumption in pre- and during-COVID-19 time: Evidence from the US," The Journal of Economic Asymmetries, Elsevier, vol. 24(C).
    • Handle: RePEc:eee:joecas:v:24:y:2021:i:c:s1703494921000323
    DOI: 10.1016/j.jeca.2021.e00227
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    More about this item

    Keywords

    Consumer spending; COVID-19; Consumer sentiment; VAR; Volatility; Asymmetry;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • F69 - International Economics - - Economic Impacts of Globalization - - - Other

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