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Article: Covid-19 outbreak, ambiguity aversion, and macroeconomic expectations

TitleCovid-19 outbreak, ambiguity aversion, and macroeconomic expectations
Authors
KeywordsAmbiguity aversion
Covid-19
Field experiment
Macroeconomic expectations
Risk aversion
Issue Date2023
Citation
China Economic Quarterly International, 2023, v. 3, n. 2, p. 144-154 How to Cite?
AbstractHow will the outbreak of Covid-19 affect people's expectations on the macroeconomy? We conduct an online experiment in China to investigate the relationship between ambiguity aversion, risk aversion, and expectations about the macroeconomy after the onset of Covid-19 which can be considered an uncertainty shock. Our study differs from previous studies as we elicit individuals' preferences in terms of ambiguity aversion and risk aversion, and test how these preferences drive macroeconomic expectations. We find that ambiguity averse subjects are more pessimistic about the effect of Covid-19 on the economic growth rate. Ambiguity averse subjects are more likely to reduce consumption and expect lower savings in response to the outbreak. More risk taking subjects have more optimistic expectations on the macroeconomy, and they are less likely to reduce consumption, investment, and savings.
Persistent Identifierhttp://hdl.handle.net/10722/329981
ISI Accession Number ID

 

DC FieldValueLanguage
dc.contributor.authorLi, King King-
dc.contributor.authorHuang, Bo-
dc.date.accessioned2023-08-09T03:36:57Z-
dc.date.available2023-08-09T03:36:57Z-
dc.date.issued2023-
dc.identifier.citationChina Economic Quarterly International, 2023, v. 3, n. 2, p. 144-154-
dc.identifier.urihttp://hdl.handle.net/10722/329981-
dc.description.abstractHow will the outbreak of Covid-19 affect people's expectations on the macroeconomy? We conduct an online experiment in China to investigate the relationship between ambiguity aversion, risk aversion, and expectations about the macroeconomy after the onset of Covid-19 which can be considered an uncertainty shock. Our study differs from previous studies as we elicit individuals' preferences in terms of ambiguity aversion and risk aversion, and test how these preferences drive macroeconomic expectations. We find that ambiguity averse subjects are more pessimistic about the effect of Covid-19 on the economic growth rate. Ambiguity averse subjects are more likely to reduce consumption and expect lower savings in response to the outbreak. More risk taking subjects have more optimistic expectations on the macroeconomy, and they are less likely to reduce consumption, investment, and savings.-
dc.languageeng-
dc.relation.ispartofChina Economic Quarterly International-
dc.subjectAmbiguity aversion-
dc.subjectCovid-19-
dc.subjectField experiment-
dc.subjectMacroeconomic expectations-
dc.subjectRisk aversion-
dc.titleCovid-19 outbreak, ambiguity aversion, and macroeconomic expectations-
dc.typeArticle-
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1016/j.ceqi.2023.05.002-
dc.identifier.scopuseid_2-s2.0-85162239260-
dc.identifier.volume3-
dc.identifier.issue2-
dc.identifier.spage144-
dc.identifier.epage154-
dc.identifier.eissn2666-9331-
dc.identifier.isiWOS:001089786800001-

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