Emergency Loans and Consumption – Evidence from COVID-19 in Iran

Covid Economics 45, 28 August 2020: 111-146

36 Pages Posted: 1 Sep 2020

See all articles by Mohammad Hoseini

Mohammad Hoseini

Tilburg University - Center for Economic Research (CentER); Institute for Management and Planning Studies (IMPS); Tilburg University - European Banking Center

Thorsten Beck

City University London - The Business School; European University Institute; Centre for Economic Policy Research (CEPR)

Date Written: August 31, 2020

Abstract

We use monthly and daily transaction data from Iran, disaggregated by provinces, good and service categories, and retail store segments to gauge the impact of government emergency loans on consumption patterns. We find that emergency loans are positively related with higher consumption of non-durable and semi-durable goods, suggesting that the emergency loans were predominantly used for their intended purpose. The effects were strongest in the first few days and then dissipated over time. We find effects only for in-store but not online transactions and in poorer rather than richer provinces, suggesting that it is the poorer who reacted more strongly with higher consumption to the emergency loans.

Keywords: COVID-19, household consumption, government support

JEL Classification: G3, I18, O16

Suggested Citation

Hoseini, Mohammad and Hoseini, Mohammad and Beck, Thorsten, Emergency Loans and Consumption – Evidence from COVID-19 in Iran (August 31, 2020). Covid Economics 45, 28 August 2020: 111-146, Available at SSRN: https://ssrn.com/abstract=3683572 or http://dx.doi.org/10.2139/ssrn.3683572

Mohammad Hoseini (Contact Author)

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Institute for Management and Planning Studies (IMPS) ( email )

North Niavaran Street
Tehran
Iran

HOME PAGE: http://imps.ac.ir/index.aspx?fkeyid=&siteid=1&pageid=2624

Tilburg University - European Banking Center ( email )

PO Box 90153
Tilburg, 5000 LE
Netherlands

Thorsten Beck

City University London - The Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

European University Institute

Villa Schifanoia
133 via Bocaccio
Firenze (Florence), Tuscany 50014
Italy

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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