Household Behavior (Consumption, Credit and Investments) During the COVID-19 Pandemic

The 2020 Covid-19 pandemic led to a large number of studies in household finance, using new high-frequency data in close to real time. This paper surveys household behavior during the pandemic, with a focus on consumption, government policies, credit and investment. The pandemic induced a rapid decline in consumption, which was affected by but largely preceded stay-at-home orders, and was followed by a rapid rebound. Government stimulus was less effective in 2020 relative to other recessions, which is consistent with both shutdowns and precautionary savings. Delinquency rates fell, unlike in other recessions, likely due to government debt relief policies. Household investment behavior was affected by pandemic-induced changes in beliefs. The paper concludes by discussing avenues for future research.