![]() ![]() Google tracking data show that traffic through retail outlets plummeted only after lockdowns were introduced, not in response to the initial appearance of coronavirus cases, he says. Lockdowns were more to blame than the virus itself, Weber says. Survey participants under lockdown orders had a dark view of the future, expecting unemployment to remain high over the next five years, and were less likely to plan future big purchases, the research demonstrates. People living in counties with shelter-in-place orders were almost 3 percent less likely to be employed than those elsewhere and to cut their spending more than the average, they find. The staggered introduction of lockdowns allowed the researchers to observe the impact of specific policies. This had a domino effect on spending as average monthly consumption plunged from $4,000 before the crisis to $3,000 by April. In addition, 44 percent of the population experienced a decline in earnings and 54 percent experienced a decrease in savings. They find that employment rates fell by 5 percentage points between the two surveys, or more than the drop during and after the Great Recession. The average household income was $68,000, or a little higher than the US median, and the average household size was 2.6, or about the same as the national figure. The researchers based their findings on 18,344 responses to the January survey and 13,771 responses to the April sounding. They tapped the Nielsen Datasets at Booth’s Kilts Center for Marketing, conducting customized surveys in January, before stay-at-home orders took effect, and in April, after they became widespread. “The COVID-19 crisis is a grim reminder that economics is a dismal science and that, quite literally, policymakers face a painful trade-off between saving lives and saving the economy,” the researchers write.Ĭoibion, Gorodnichenko, and Weber used sequential surveys-originally designed to probe consumers’ expectations for inflation-to gauge the effects of COVID-19 lockdowns on Americans’ employment, personal finances, spending patterns, and sentiment about the outlook. The findings help explain growing impatience among policy makers and the general population in the face of the starkest trade-off most people will ever face, between their lives and their livelihoods. ![]() Lockdowns have already slashed incomes and wealth for about half of all Americans, according to the University of Texas’s Olivier Coibion, University of California at Berkeley’s Yuriy Gorodnichenko, and Chicago Booth’s Michael Weber.Īnalyzing real-time evidence of the pandemic’s economic consequences, the researchers find that people living under lockdown orders feel they have little hope of a speedy recovery. The staggering economic costs of fighting the COVID-19 pandemic are becoming clear as stay-at-home orders in the United States drag on for months and freeze economic activity. ![]()
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