Heterodox Economic Cycles Theory during the COVID-19 Economic Crisis: Social Volatility, Affect and the Finance Market-Real Economy Gap

Proceedings of the 20th International Research Association for Interdisciplinary Studies (RAIS) Conference on Social Sciences and Humanities, pp. 108-118, December 6-7, 2020.

120 Pages Posted: 14 Jan 2021 Last revised: 10 Mar 2021

See all articles by Julia M. Puaschunder

Julia M. Puaschunder

Harvard University; New School for Social Research; Princeton University; George Washington University Center for International Business Education and Research; The New School - Bernard Schwartz Center for Economic Policy Analysis (CEPA)

Date Written: January 9, 2021

Abstract

The currently ongoing novel Coronavirus-crisis is an external shock coming down on society with direct impact on societal moods and subsequently connected economic changes. With growing digitalization and quickening of transfer speed, information exchange in the individual involvement to break trends online on a global scale may impose unknown systemic risks in causing social volatility in international economics. Research may explore how human beings’ communication and interaction results in socially constructed volatility that echoes in economic correlates. This paper theoretically covers the history of heterodox economic cycles in order to then propose to explore the role of communication and temporal foci in pandemic communication to create social volatility underlying economic downturns. Based on the COVID-19 economic fallout, the article outlines that the finance world has different temporal perceptions than the actual chronological time measurement in contrast to the real economy. In the real economy, concrete constraints create a more emotional and destructive reaction to the general information about COVID-19. Social online media plays a role in loading these two groups. Comparing the economic consequence of the endogenous crunch of the 2008 World Financial Recession with the external economic shock of the COVID-19 pandemic aids to retrieve crisis-specific recovery recommendations in the overall discussion. Understanding how the social compound forms economic outcomes promises to explain how market outcomes are developed in society and can be shaped by strategic communication with special attention to new media technologies.

Keywords: Affect, Collective Moods, Communication, Consumption, Coronavirus, COVID-19, Digitalization, Economic Fundamentals, External Shock, Information, Lockdown, News, Pandemic, Social Volatility, Socio-Economics, Socio-Psychological Foundations, 2008/09 World Financial Crisis

Suggested Citation

Puaschunder, Julia M., Heterodox Economic Cycles Theory during the COVID-19 Economic Crisis: Social Volatility, Affect and the Finance Market-Real Economy Gap (January 9, 2021). Proceedings of the 20th International Research Association for Interdisciplinary Studies (RAIS) Conference on Social Sciences and Humanities, pp. 108-118, December 6-7, 2020., Available at SSRN: https://ssrn.com/abstract=3763146 or http://dx.doi.org/10.2139/ssrn.3763146

Julia M. Puaschunder (Contact Author)

Harvard University ( email )

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New School for Social Research ( email )

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Princeton University ( email )

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George Washington University Center for International Business Education and Research ( email )

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