Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/237909
Authors: 
Dzung Bui
Dräger, Lena
Hayo, Bernd
Giang Hong Nghiem
Year of Publication: 
2021
Series/Report no.: 
IMK Working Paper No. 211
Publisher: 
Hans-Böckler-Stiftung, Institut für Makroökonomie und Konjunkturforschung (IMK), Düsseldorf
Abstract: 
In response to the economic crisis created by the COVID-19 pandemic, many governments provided financial assistance to households. Using representative consumer surveys conducted during the pandemic in 2020, we examine the effects of this fiscal policy instrument on households in two emerging economies, Vietnam and Thailand. Our paper contributes to the literature by studying consumer sentiment and durable spending responses to government financial support and the underlying transmission channels for these responses. We find that government support improves consumer sentiment and increases the likelihood of durable spending. Possible channels for these effects include more optimistic macroeconomic expectations and higher trust in the government's ability to deal with the pandemic, as well as less concern about the general impact of the crisis. We also find that financial support improves individuals' mental health and life satisfaction. Our results suggest that government financial support not only helps stimulate the economy but also enhances people's well-being more generally.
Subjects: 
Fiscal policy
Financial support of households
Consumer sentiment
Durables spending
Expectations
Government trust
COVID-19
Thailand
Vietnam
JEL: 
E62
E71
D12
D83
H31
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Working Paper

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