Household spending and fiscal support during the COVID-19 pandemic: Insights from a new consumer survey

Dimitris Georgarakos and Geoff Kenny

Journal of Monetary Economics, 2022, vol. 129, issue S, S1-S14

Abstract: This paper introduces the Consumer Expectations Survey (CES), a new online, high frequency panel survey of euro area consumers’ expectations and behaviour. The paper also investigates whether public perceptions about fiscal support measures introduced during the pandemic have influenced spending behaviour. We show that simple and factual information treatments about government support policies that are communicated to random subsets of respondents can help improve consumers’ perceptions about the adequacy of fiscal interventions relative to that of an untreated control group. We find evidence that this improvement in beliefs has a causal effect on consumer spending, in particular raising spending on large items like holidays and cars. Moreover, we show that such beliefs influence household expectations about own income prospects, future access to credit and financial sentiment, while they do not affect expectations about future taxes, implying no evidence of Ricardian effects in household behaviour. We find that perceptions affect spending also amongst households that did not receive any government support, suggesting that fiscal interventions can have broader consequences as they influence the behaviour of groups beyond the targeted ones.

Keywords: Consumer Expectations Survey; Fiscal Policy; COVID-19; Household perceptions (search for similar items in EconPapers)
JEL-codes: D12 E21 H31 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:129:y:2022:i:s:p:s1-s14

DOI: 10.1016/j.jmoneco.2022.02.007

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