Views: 0 Author: Site Editor Publish Time: 2021-09-03 Origin: Site
So, which aspect has greater influence, the past or the future? This is a crucial question in a period of total uncertainty. Looking back at the situation before the outbreak of the new crown epidemic, it will lead to the practice of "excessive life" and anxiety. The government needs people to be optimistic, so there will be something that makes them optimistic. This is why—for example—US Treasury Secretary Janet Yelon urged the G7 to increase fiscal stimulus, while the European Union is using a 750 billion euro recovery fund.
Perhaps this is why some policymakers are so positive about their growth prospects. For example, Andy Haldane, chief economist at the Bank of England, said that breakthroughs made in vaccines are expected to offset people's "excessive caution and excessive anxiety" about the economic outlook. According to the logic of this optimistic forecast, many companies and households in advanced economies have increased their total savings significantly in the past 12 months, and their repressed willingness to consume is quite huge.
That’s right, some people’s savings have increased dramatically, and the British household savings rate has soared, and it has remained at a level of nearly 17%; the corresponding figure in the US is 14%. Other households and businesses have lost income or revenue, and have taken on more debts. But what we have now is not the only factor that determines expenditures after the epidemic. The challenge is how to make people feel optimistic, but not become an overly optimistic "Poliana".
Unfortunately, although economics focuses on the role of expectations, this discipline does not have a good insight into how expectations are formed—whether it is an individual's expectations or the overall choices of the population when people interact with each other. There are some interesting studies on the role of narrative in influencing people’s economic expectations, but they are not covered in most standard economic policy analyses.
