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Does Policy Communication During COVID Work?

Author

Listed:
  • Olivier Coibion

    (University of Texas at Austin - Department of Economics; NBER)

  • Yuriy Gorodnichenko

    (University of California, Berkeley - Department of Economics; NBER)

  • Michael Weber

    (University of Chicago - Booth School of Business; NBER)

Abstract

Using a large-scale survey of U.S. households during the Covid-19 pandemic, we study how new information about fiscal and monetary policy responses to the crisis affects households’ expectations. We provide random subsets of participants in the Nielsen Homescan panel with different combinations of information about the severity of the pandemic, recent actions by the Federal Reserve, stimulus measures, as well as recommendations from health officials. This experiment allows us to assess to what extent these policy announcements alter the beliefs and spending plans of households. In short, they do not, contrary to the powerful effects they have in standard macroeconomic models.

Suggested Citation

  • Olivier Coibion & Yuriy Gorodnichenko & Michael Weber, 2020. "Does Policy Communication During COVID Work?," Working Papers 2020-76, Becker Friedman Institute for Research In Economics.
    • Handle: RePEc:bfi:wpaper:2020-76
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Subjective expectations; fiscal policy; monetary policy; COVID-19; surveys;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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