Journal Article

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

Authors

  • Bui
  • D.
  • Dräger
  • L.
  • Hayo
  • B.
  • Nghiem
  • G.
Publication Date

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.

Kiel Institute Expert

Info

JEL Classification
E21, E37, E71, D84, D83
DOI
10.1016/j.ejpoleco.2022.102295

Key Words

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