The effects of fiscal policy on households during the COVID-19 pandemic

Evidence from Thailand and Vietnam

authored by: Dzung Bui, Lena Dräger, Bernd Hayo, Hong Giang Nghiem
Abstract: The economic crisis created by the COVID-19 pandemic induced many governments to provide 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, Thailand and Vietnam. Our paper contributes to the literature by studying how consumer sentiment and durable spending relate to receiving government financial support and the underlying transmission channels for these responses. We find that financial support to households is related to more positive consumer sentiment and increases in actual and planned durable spending, while also being correlated with a more optimistic macroeconomic outlook, higher trust in the government, and higher personal well-being.
Organisation(s): Institute of Monetary Economics
External Organisation(s): Philipps-Universität Marburg
Type: Article
Journal: World Development
Volume: 153
No. of pages: 12
ISSN: 1873-5991
Publication date: 05.2022
Publication status: Published
Peer reviewed: Yes
ASJC Scopus subject areas: Geography, Planning and Development, Building and Construction, Development, Sociology and Political Science, Economics and Econometrics
Electronic version(s): https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8831125/ (Access: Open)
https://doi.org/10.1016/j.worlddev.2022.105828 (Access: Closed)

BibTeX

@article{3855ee6cfe00464ba6480af1ed4f19ba,
title = "The effects of fiscal policy on households during the COVID-19 pandemic: Evidence from Thailand and Vietnam",
abstract = "The economic crisis created by the COVID-19 pandemic induced many governments to provide 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, Thailand and Vietnam. Our paper contributes to the literature by studying how consumer sentiment and durable spending relate to receiving government financial support and the underlying transmission channels for these responses. We find that financial support to households is related to more positive consumer sentiment and increases in actual and planned durable spending, while also being correlated with a more optimistic macroeconomic outlook, higher trust in the government, and higher personal well-being.",
keywords = "Consumer sentiment, COVID-19, D12, D83, Durables spending, E62, E71, Financial support of households, Fiscal policy, Government trust, H31, Macroeconomic expectations, Thailand, Vietnam",
author = "Dzung Bui and Lena Dr{\"a}ger and Bernd Hayo and Nghiem, {Hong Giang}",
note = "Funding Information: We thank the editor, two anonymous referees, participants of the Annual Conference of the German Economic Association in 2021, the Third Behavioral Macroeconomics Workshop at the University of Bamberg, and a research seminar at the University of Hannover for helpful comments.",
year = "2022",
month = may,
doi = "10.1016/j.worlddev.2022.105828",
language = "English",
volume = "153",
journal = "World Development",
issn = "1873-5991",
publisher = "Elsevier BV",
}