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Macroeconomic expectations and consumer sentiment during the COVID-19 pandemic: The role of others’ beliefs

Author

Listed:
  • Bui, Dzung
  • Dräger, Lena
  • Hayo, Bernd
  • Nghiem, Giang

Abstract

This paper investigates the effect of information about cross-country ratings of the government’s and the public’s reaction to the COVID-19 pandemic on consumers’ macroeconomic expectations and sentiment. We conduct consumer surveys with randomized control trials (RCTs) in two waves in Thailand and Vietnam. The information treatments have the strongest effect when the information shown contradicts consumers’ prior beliefs. In the first survey, conducted when the first lockdown was eased, treatment effects are stronger in Vietnam, causing more optimistic expectations and sentiment. In the second survey, conducted at the start of the second wave of infections, treatment effects are stronger in Thailand, causing a more pessimistic outlook.

Suggested Citation

  • Bui, Dzung & Dräger, Lena & Hayo, Bernd & Nghiem, Giang, 2023. "Macroeconomic expectations and consumer sentiment during the COVID-19 pandemic: The role of others’ beliefs," European Journal of Political Economy, Elsevier, vol. 77(C).
    • Handle: RePEc:eee:poleco:v:77:y:2023:i:c:s0176268022000921
    DOI: 10.1016/j.ejpoleco.2022.102295
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    More about this item

    Keywords

    Consumer sentiment; COVID-19; Randomized control trial (RCT); Survey experiment; Belief updating; Macroeconomic expectations; Thailand; Vietnam;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E71 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on the Macro Economy
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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