CESEE Households amid the Financial Crisis: Euro Survey Shows Darkened Economic Sentiment and Changes in Savings Behavior

Sandra Dvorsky (), Thomas Scheiber () and Helmut Stix
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Sandra Dvorsky: Oesterreichische Nationalbank, European Affairs and International Financial Organizations Divison, http://www.oenb.at
Thomas Scheiber: Oesterreichische Nationalbank, Foreign Research Division, http://www.oenb.at

Focus on European Economic Integration, 2009, issue 4, 71-83

Abstract: This paper utilizes information from the OeNB Euro Survey, which was launched in 2007 and is conducted twice a year in ten CESEE countries. The most recent survey wave of May to June 2009 focused on the impact of the financial crisis on CESEE households. Results show, first, that the financial crisis is in fact severely felt throughout the region: Respondents’ assessment of the current economic situation has deteriorated, trust in the future stability of local currencies has diminished, and trust in banks has declined in almost all countries surveyed. Second, the analysis of aggregate monetary statistics reveals that households reacted by adjusting their portfolios immediately, but developments differ substantially across countries. Third, in countries with more persistent withdrawals, euro cash in circulation, surprisingly, has declined because households resorted to dissaving to compensate for decreasing income. The authors conclude that although a massive shock has hit the region, no dramatic changes in the overall degree of euroization have occurred. This subdued impact is likely to signal that past stabilization efforts have paid off and that the economic and monetary policy measures taken in the course of t the crisis were successful.

Keywords: Euroization; global financial crisis; portfolio decision; trust; survey data; Central; Eastern and Southeastern Europe (search for similar items in EconPapers)
JEL-codes: D14 E41 E50 G11 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (8)

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