We provide the first analysis on how fear of the novel coronavirus affects current economic sentiment. First, we collect a global dataset on internet searches indicative of economic anxieties , which serve as a leading indicator of subsequent aggregate demand contractions . We find that the arrival of coronavirus in a country leads to a substantial increase in such internet searches of up to 58 percent. Second,  to understand how information about the coronavirus drives economic anxieties, we conduct a survey experiment in a representative sample of the US population . We find that participantsvastly overestimate mortality from and contagiousness of the virus. Providing participants with information regarding these statistics substantially lowers participants' expectations about the severity of the crisis and participants' worries regarding the aggregate economy and their personal economic situation. These results suggest that factual public education about the virus will help to contain spreading economic anxiety and improve economic sentiment .
We provide the first analysis of how the global spread of the novel coronavirus affects contemporaneous economic sentiment. First, we collect a global dataset on internet searches indicative of economic anxieties . We find that the arrival of coronavirus in a country led to a substantial increase in such internet searches of up to 58 percent. Second, leveraging two US representative survey experiments conducted in early and mid-March 2020, we document a rapid surge in economic anxieties after the arrival of the coronavirus in the US. Third, to understand how information about the coronavirus affects these anxieties, we measure perceptions about the coronavirus . We find substantial heterogeneity in participants' beliefs about the mortality from and contagiousness of the virus. Fourth, experimentally providing participants with information about mortality and contagiousness causally affects participants' worries regarding the aggregate economy and their personal economic situation. Finally, we document that participants' subjective mental models understate the non-linear nature of disease spread, and that these mental models shape the extent of economic worries. These results underscore the importance of public education about the virus for successful containment as well as the need for timely measures that decrease economic hardship and anxiety during a major global pandemic .
R
on how fear
of how the global spread
R
current
contemporaneous
D
, which serve as a leading indicator of subsequent aggregate demand contractions
R
leads
led
A
leveraging two US representative survey experiments conducted in early and mid-March 2020, we document a rapid surge in economic anxieties after the arrival of the coronavirus in the US. Third,
R
drives economic
affects these
R
conduct a survey experiment in a representative sample of the US population
measure perceptions about the coronavirus
R
that participantsvastly overestimate
substantial heterogeneity in participants' beliefs about the
R
Providing
Fourth, experimentally providing
R
regarding these statistics substantially lowers participants' expectations about the severity of the crisis and
about mortality and contagiousness causally affects
R
These results suggest that factual
Finally, we document that participants' subjective mental models understate the non-linear nature of disease spread, and that these mental models shape the extent of economic worries. These results underscore the importance of
R
will help to contain spreading economic anxiety and improve economic sentiment
for successful containment as well as the need for timely measures that decrease economic hardship and anxiety during a major global pandemic