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Abstract In early March 2020, two crises emerged: the COVID-19 public health crisis and a corresponding economic crisis resulting from business closures and skyrocketing job losses. While the link between socioeconomic status and infectious disease is well-documented, the psychological relationships among economic considerations, such as financial constraint and economic anxiety, and health considerations, such as perceptions of disease spread and preventative actions, is not well understood. Despite past research illustrating the strong link between financial fragility and a wide range of behaviors, surprisingly little research has examined the psychological relationship between the economic crisis and beliefs and behaviors related to the co-occurring health crisis. We show that financial constraint predicts people’s beliefs about both their personal risk of infection and the national spread of the virus as well as their social distancing behavior. In addition, we compare the predictive utility of financial constraint to two other commonly studied factors: political partisanship and local disease severity. We also show that negative affect partially mediates the relationship between financial constraint and COVID-19 beliefs and social distancing behaviors. These results suggest the economic crisis created by COVID-19 spilled over into people’s beliefs about the health crisis and their behaviors.
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Policy experiments and financial regulation: Using laboratory methods to evaluate responses to the 2007–2009 financial crisis
Abstract This paper reviews an emerging experimental literature that uses laboratory methods to both identify causes of the 2007–2009 financial crisis, and to assess the effectiveness of policies implemented in response. Papers reviewed include experiments conducted to evaluate central bank and Treasury responses to the crisis, experiments that study the consequences of interconnectedness between financial firms on financial system stability, and experiments conducted to evaluate policies intended to more effectively regulate specific types of financial institutions. Laboratory methods are ideally suited to investigating the consequences of untested policies in new environmental circumstances – just the situation provoked by the crisis. The continually evolving structure of the financial system suggests an expanded future role for laboratory methods in this area.
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- Award ID(s):
- 1949112
- PAR ID:
- 10523461
- Editor(s):
- Lucey, Brian; Mallick, Sushanta; Stanley, Tom
- Publisher / Repository:
- Wiley and Sons.
- Date Published:
- Journal Name:
- Journal of Economic Surveys
- Volume:
- 37
- Issue:
- 3
- ISSN:
- 0950-0804
- Page Range / eLocation ID:
- 657 to 687
- Subject(s) / Keyword(s):
- bank regulation: financial market stability: laboratory experiments
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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- Free Publicly Accessible Full Text
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Accepted Manuscript1.0
- Journal Article:
- https://doi.org/10.1111/joes.12517
