News and Uncertainty About COVID-19: Survey Evidence and Short-Run Economic Impact
51 Pages Posted: 11 Feb 2022
Date Written: December 2021
A tailor-made survey documents consumer perceptions of the U.S.~economy's response to a large shock: the advent of the COVID-19 pandemic. The survey ran at a daily frequency between March 2020 and July 2021. Consumer perceptions regarding output and inflation react rapidly. Uncertainty is pervasive. A business-cycle model calibrated to the consumer views provides an interpretation. The rise in household uncertainty amplifies the pandemic recession by a factor of three. Different perceptions about monetary policy can explain why consumers and professional forecasters agree on the recessionary impact, but have sharply divergent views about inflation.
Keywords: Consumer expectations, Large shock, monetary policy, survey, uncertainty
JEL Classification: C83, E32, E52
Suggested Citation: Suggested Citation