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Once bitten, twice bold? Early life tragedy and central bankers’ reaction to COVID-19

Maqsood Aslam and Etienne Farvaque ()

Finance Research Letters, 2022, vol. 44, issue C

Abstract: Have negative experiences (in particular, natural disasters) that central bankers’ have known in their early life influenced monetary policy decisions in front of the COVID-19 pandemic? We answer this question using a sample of 19 developing countries. We show that central bankers who experienced episodes of epidemics in their early life lowered interest rates faster and lower during the COVID-19 pandemic. Personal experience of decision-makers has contributed strongly to explain their behavior during the crisis.

Keywords: Policy rate; COVID-19; Pandemic; Central banks (search for similar items in EconPapers)
JEL-codes: E58 E71 G41 O23 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:44:y:2022:i:c:s1544612321001410

DOI: 10.1016/j.frl.2021.102060

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