Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/248318 
Year of Publication: 
2021
Series/Report no.: 
Bank of Canada Staff Working Paper No. 2021-57
Publisher: 
Bank of Canada, Ottawa
Abstract: 
Prospective economic developments depend on the behavior of consumer spending. A key question is whether private expenditures recover once social distancing restrictions are lifted or whether the COVID-19 crisis had a sustained impact on consumer confidence, preferences, and hence, spending. The elongated and profound experience of the COVID-19 crisis may durably affect consumer preferences. We conducted a representative consumer survey in five European countries in summer 2020 after the release of the first wave's lockdown restrictions. We document the underlying reasons for households' reduction in consumption in five key sectors: tourism, hospitality, services, retail, and public transports. We identify a large confidence shock in the Southern European countries and a shift in consumer preferences in the Northern European countries, particularly among high-income earners. We conclude that the COVID-19 experience has altered consumer behavior and that long-term sectoral consumption shifts may occur.
Subjects: 
Coronavirus disease (COVID-19)
Domestic demand and components
Firm dynamics
Fiscal policy
Recent economic and financial developments
JEL: 
D12
D81
D84
E21
E60
E71
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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