TY - JOUR

T1 - The effects of fiscal policy on households during the COVID-19 pandemic

T2 - Evidence from Thailand and Vietnam

AU - Bui, Dzung

AU - Dräger, Lena

AU - Hayo, Bernd

AU - Nghiem, Hong Giang

N1 - Funding Information: We thank the editor, two anonymous referees, participants of the Annual Conference of the German Economic Association in 2021, the Third Behavioral Macroeconomics Workshop at the University of Bamberg, and a research seminar at the University of Hannover for helpful comments.

PY - 2022/5

Y1 - 2022/5

N2 - The economic crisis created by the COVID-19 pandemic induced many governments to provide financial assistance to households. Using representative consumer surveys conducted during the pandemic in 2020, we examine the effects of this fiscal policy instrument on households in two emerging economies, Thailand and Vietnam. Our paper contributes to the literature by studying how consumer sentiment and durable spending relate to receiving government financial support and the underlying transmission channels for these responses. We find that financial support to households is related to more positive consumer sentiment and increases in actual and planned durable spending, while also being correlated with a more optimistic macroeconomic outlook, higher trust in the government, and higher personal well-being.

AB - The economic crisis created by the COVID-19 pandemic induced many governments to provide financial assistance to households. Using representative consumer surveys conducted during the pandemic in 2020, we examine the effects of this fiscal policy instrument on households in two emerging economies, Thailand and Vietnam. Our paper contributes to the literature by studying how consumer sentiment and durable spending relate to receiving government financial support and the underlying transmission channels for these responses. We find that financial support to households is related to more positive consumer sentiment and increases in actual and planned durable spending, while also being correlated with a more optimistic macroeconomic outlook, higher trust in the government, and higher personal well-being.

KW - Consumer sentiment

KW - COVID-19

KW - D12

KW - D83

KW - Durables spending

KW - E62

KW - E71

KW - Financial support of households

KW - Fiscal policy

KW - Government trust

KW - H31

KW - Macroeconomic expectations

KW - Thailand

KW - Vietnam

UR - http://www.scopus.com/inward/record.url?scp=85124887573&partnerID=8YFLogxK

U2 - 10.1016/j.worlddev.2022.105828

DO - 10.1016/j.worlddev.2022.105828

M3 - Article

AN - SCOPUS:85124887573

VL - 153

JO - World Development

JF - World Development

SN - 1873-5991

M1 - 105828

ER -