Fear, Response, and Macroeconomic Expectations Amid COVID-19 in the US - Free Essay

The research question discussed in the article is ‘What are the macroeconomic expectations after concerns about COVID-19?’ The survey was run in many batches on 5th and 6th March to reach individuals in distinct time zones or with distinct work schedules. The respondents who were comfortable to answer the mandatory question were selected. The sample size of the study was 520 respondents who answered affirmatively and went on to complete the survey. However, the researcher dropped 18 respondents who finalized the study in less than 2 minutes. The rest of the respondents completed the survey in a mean of 7.3 minutes (Binder 722). The survey began with inquiries regarding gender, age, household income, education, and stock market participation. The respondents chose their main source of news regarding the economy from print sources, social media, or online sources. Next, they answered a set of questions regarding their attention to and fears about COVID-19 and news regarding the Fed and stock market. The data used in the study was attention, worries, and response to the coronavirus pandemic. The results of the study are that nearly 38% of the respondents were knowledgeable of the fact that the Fed had reduced the rates of interest (Binder 724). Great worries are linked with greater anticipations of inflation and more pessimist anticipations of unemployment. Some consumers became more optimistic regarding unemployment and improved their anticipations of inflation downwards (Binder 1). The results of the study Consumers who were already acquainted with the rate cut are more pessimistic regarding future employment. In addition, the consumers had higher expectations of inflation in which those who knew and did not know about the rate cut were 3.7% and 2.8% respectively. When regulating the features of the respondents, though, the distinctions in macroeconomic anticipations by previous knowledge of the rate cut are not statistically significant. Also, nearly 80% of the respondents with previous knowledge and 71% without earlier knowledge did not revise their anticipations on unemployment. In fact, 60 respondents with previous knowledge became more pessimistic regarding future unemployment. Furthermore, 64% of the respondents with earlier knowledge of the rate cut and 40% who had no knowledge did not revise it. Notably, 73% of respondents with earlier knowledge and 58% of participants who were not aware of it revised it. In the quantitative inflation, anticipation did not react to the treatment whereby the posttreatment median and mean were 2% and 2.9% respectively and the pretreatment median and mean were 2% and 3.2% respectively (Binder 728). Of the consumers who became more optimistic regarding unemployment following details regarding the response of the Fed, 59% revised their anticipations of inflation down and only 11% revised their inflation anticipations (Binder 728). On the other hand, for consumers who became more pessimistic regarding unemployment and who understood the response of the Fed as an indication of the poor state of the economy-28% revised their inflation anticipations down and 47% revised up (Binder 728).

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The significance of the article is to understand what the fears of COVID-19 can do to the macro economy of the United States. These worries were related to the more pessimistic employment anticipations and expectations of higher rates of inflation. The study will help academicians and economists to evaluate the anticipations of consumers with or without previous knowledge of the rate cut of the Fed. Previous knowledge of the rate cut is linked with the features of the respective respondents including numeracy and ownership of stocks which might impact the macroeconomic anticipations. The macroeconomic anticipations might increase the awareness of the rate cut; for instance, consumers who were particularly pessimistic regarding future unemployment could have strived to obtain news regarding the Federal Reserve policy. The study will be vital in assessing the anticipations of the respondent's change when they offer them details regarding the rate cut.

I will adopt a qualitative research approach to explore the relationship between COVID-19 and macroeconomic expectations. The theoretical perspective most associated with qualitative scholars is phenomenology. The academician will strive to understand the meaning of events and connotations. The interviews will be used to gather data from the participants. Also, there will be questionnaires to fill in their opinions regarding the study. The data to be used in the study will be the macroeconomic variables of the United States economy between December 2019 and 2020. The sample size for the study will be 120 because it sounds like a reasonable size. This would tend to avoid generalization of results. The target population for the sample will be business people, working professionals, and students who have been impacted by COVID-19. This target population was selected because they are familiar with the anticipations of COVID-19. The sampling technique that I will adopt for this study will be convenience sampling because the participants will be chosen to be available and will engage in it. The data analysis for the study to be adopted will be frequencies and will be put in SPSS. Also, the academician will look at guaranteeing that the respondents understand that they will ensure that their information is not disclosed to a third party. The research will be carried out on December 31st, 2020.

Work Cited

Binder, Carola. "Coronavirus fears and macroeconomic expectations." Review of Economics and Statistics (2020): 1-27.doi: 10.1162/rest_a_00931