Exposure to the COVID-19 Stock Market Crash and Its Effect on Household Expectations-Reference-Cited by-同舟云学术

Exposure to the COVID-19 Stock Market Crash and Its Effect on Household Expectations

Published:2021-11-30 Issue:5 Volume:103 Page:994-1010
ISSN:0034-6535
Container-title:The Review of Economics and Statistics
language:en
Short-container-title:

Author:

Hanspal Tobin¹,Weber Annika²,Wohlfart Johannes³

Affiliation:

1. WU Vienna University of Economics and Business

2. Goethe University Frankfurt and Leibniz Institute for Financial Research SAFE

3. University of Copenhagen, CESifo, and Danish Finance Institute

Abstract

Abstract We survey a representative sample of U.S. households to study how exposure to the COVID-19 stock market crash affects expectations and planned behavior. Wealth shocks are associated with upward adjustments of expectations about retirement age, desired working hours, and household debt but have only small effects on expected spending. We provide correlational and experimental evidence that beliefs about the duration of the stock market recovery shape households' expectations about their own wealth and their planned investment decisions and labor market activity. Our findings shed light on the implications of household exposure to stock market crashes for expectation formation.

Publisher

MIT Press - Journals

Subject

Economics and Econometrics,Social Sciences (miscellaneous)

Link

https://direct.mit.edu/rest/article-pdf/103/5/994/1975671/rest_a_01011.pdf

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