European household confidence and COVID-19: Lessons for South Korea

초록

This study investigates the effect of the coronavirus disease (COVID-19) pandemic on household confidence in 27 EU countries and the United Kingdom. We also examine whether the countries’ health and economic policy responses, in particular stay-at-home policies, have either mitigated or amplified the effects of COVID-19 on household confidence. We find evidence that the COVID-19 pandemic is associated with significantly lower household confidence, an effect that may have been compounded by reduced mobility due to voluntary and mandated stay-at-home policies. We also find that increased visits to parks and recreation facilities resulting from these stay-at-home policies may have helped mitigate the adverse effects of the COVID-19 pandemic on household confidence. Similarly, consumer confidence declined in South Korea at the beginning of 2020. The experience of European countries suggest that although the South Korean government was relatively more successful in managing the spread of COVID-19, the effects of stay-at-home policies on household confidence could be examined to further minimize the economic costs of the pandemic.

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