Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/311843 
Year of Publication: 
2024
Series/Report no.: 
Deutsche Bundesbank Discussion Paper No. 42/2024
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
Using a randomized information experiment embedded in a representative survey, we study households' economic expectations at onset of the COVID-19 crisis. Our experimental evidence indicates that households are not fully aware of what is happening in the economy shortly after the pandemic outbreak. Households that receive information on experts' views on the economy become more pessimistic and uncertain about the economic outlook and less willing to consume. Surprisingly, this also holds for households that receive information on major monetary and fiscal stimulus measures announced in response to the COVID-19 crisis, suggesting that policy announcements convey bad news about the economy that overshadow the good news about the measures announced. The effects are driven by households who are less exposed to and less informed about the economic consequences of the pandemic, underscoring that personal experiences receive a large weight in household expectation formation.
Subjects: 
household expectations
beliefs
information
policy announcements
randomized information experiment
COVID-19
JEL: 
D12
D83
D91
E58
G11
ISBN: 
978-3-98848-017-0
Document Type: 
Working Paper

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