Center for Nonlinear Dynamics in Economics and Finance (CeNDEF) researchers recently had a paper published in the Centre for Economic Policy Research (CEPR) journal on the topic of COVID-19 as a driver of change in consumer behaviour.
The paper Is COVID-19 a consumption game changer? Evidence from a large-scale multi-country survey was written by CeNDEF researchers Cars Hommes and Stefanie Huber, ASE researcher Isabelle Salle, and Alexander Hodbod (ECB). The paper explores whether the COVID-19 crisis will have a sustained impact on consumer confidence, preferences, and, hence, spending. Huber explains the findings in more detail in a video interview.
Another CEPR interview with Huber about this research and its implications for government policy was also published in a column on the VoxEU website. One of the interesting assertions by the research team is that 'Fiscal policy must recognise that some firms will become obsolete in the altered post-COVID-19 environment. To achieve a swift recovery, these obsolete firms must be allowed to fail fast so that resources can be reallocated to more efficient uses'. Such an approach is necessary to 'zombification' of the economy.
The Centre for Economic Policy Research is a network of over 700 researchers based mainly in universities throughout Europe. The Centre’s goal is to promote research excellence and policy relevance in European economics.