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Belief polarization and Covid-19

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  • Ambrocio, Gene
  • Hasan, Iftekhar

Abstract

We document a remarkable increase in economic belief polarization - disagreement - regarding the future state of the economy across Europe during the Covid-19 pandemic. We find evidence suggesting that belief polarization may have impeded the implementation of pandemic response measures such as social distancing and teleworking as well as policies providing economic support. We find an association between belief polarization on the one hand and trust in the press, fake news, political polarization, and possibly also inequality on the other. These results indicate that belief polarization, by hindering the implementation of crisis response policies, may be one channel which could amplify the negative effects of large or unusual crises.

Suggested Citation

  • Ambrocio, Gene & Hasan, Iftekhar, 2022. "Belief polarization and Covid-19," Bank of Finland Research Discussion Papers 10/2022, Bank of Finland.
    • Handle: RePEc:zbw:bofrdp:102022
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    More about this item

    Keywords

    Polarization; consumer survey; Covid-19;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
    • E71 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on the Macro Economy
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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