Economic analysis of the COVID-19 pandemic and policy responses

Abstract

This dissertation studies the Coronavirus disease 2019 (COVID-19) economic crisis and policy responses in South Korea. The first chapter briefly summarizes how destructive the COVID-19 pandemic was to the economy of South Korea and how South Korea responded with recovery policies. The second chapter examines the impact of COVID-19 economic stimulus payments, distributed at the early pandemic stage, on the sales of local small businesses using the difference-in-differences approach to the two neighboring regions in the Seoul metropolitan area, Gyeonggi and Incheon. Our estimates suggest that the restricted stimulus transfer effectively helped the hard-hit small business owners with a stimulus multiplier of 1.09 for the sales of the policy-targeted local small businesses. The third chapter investigates how information cues on the COVID-19 recovery policy and political polarization shape people's policy preferences and consumer confidence from the case of local currency in South Korea. Through a large-scale online survey experiments, we find that a person's policy view is formed by a simple information nudge, but its effect is not strong enough to sway their political affiliation.