Experts and Epidemics

Klaus Gründler () and Niklas Potrafke

No 8556, CESifo Working Paper Series from CESifo

Abstract: Do experts adjust their policy recommendations when the facts change? We conduct a large-scale randomized experiment among 1,224 economic experts across 109 countries that includes two treatments. The first treatment is the geographic and temporal variation in the initial spread of Covid-19 during March 2020, which we use as a natural experiment. The second is a randomly assigned information treatment that informs experts about the past macroeconomic performance of their country. We find that greater exposure to Covid-19 decreases the probability to recommend contractionary fiscal policies. A better macroeconomic performance increases the probability to implement contractionary policies and reduces the exposure effect to Covid-19. While our results show that experts adjust their policy recommendations to changing environments, sentiment analyses of open-ended questions asked after the treatment suggest that these adjustments are caused by Bayesian information updating and not by a change in preferences.

Keywords: epidemics; Covid-19; health; experts; fiscal preferences; randomized experiment (search for similar items in EconPapers)
JEL-codes: A11 E62 H60 H63 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-exp, nep-hea and nep-mac
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_8556

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