TY - JOUR

T1 - Macroeconomic expectations and consumer sentiment during the COVID-19 pandemic

T2 - The role of others’ beliefs

AU - Bui, Dzung

AU - Dräger, Lena

AU - Hayo, Bernd

AU - Nghiem, Giang

N1 - Funding Information: We thank the editor as well as three anonymous referees for valuable comments that helped improve the paper. We also thank Carola Binder, Michael Ehrmann, Tobin Hanspal, Baptiste Massenot, Michael Weber, Stephan Thomsen and Lisa Spantig for helpful comments. We thank Long Giang for providing Vietnamese data used to calculate demographic statistics as benchmarks for the population weights. In addition, we thank seminar participants at the Macroeconomic Policy Institute (IMK) and the Leibniz University Hannover, as well as participants of the 26th IIF Workshop: Economic Forecasting in Times of Covid-19, the 8th International Conference on Applied Research in Economics, the 11th ifo Conference on Macroeconomics and Survey Data, German Economic Association Annual Congress 2021, European Economic Association Annual Congress 2021, and the International TVSEP Conference on “Shocks and Resilience in Rural Southeast Asia” 2022 for comments and suggestions.

PY - 2023/3

Y1 - 2023/3

N2 - 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.

AB - 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.

KW - Belief updating

KW - Consumer sentiment

KW - COVID-19

KW - Macroeconomic expectations

KW - Randomized control trial (RCT)

KW - Survey experiment

KW - Thailand

KW - Vietnam

UR - http://www.scopus.com/inward/record.url?scp=85138204409&partnerID=8YFLogxK

U2 - 10.1016/j.ejpoleco.2022.102295

DO - 10.1016/j.ejpoleco.2022.102295

M3 - Article

AN - SCOPUS:85138204409

VL - 77

JO - European Journal of Political Economy

JF - European Journal of Political Economy

SN - 0176-2680

M1 - 102295

ER -