The Money Anxiety Index jumped 10.5 points in March of this year. The only other time the Money Anxiety Index increased that much in one month was right after the attack of September 11, when the index increased by 10.8 points. According to Dr. Dan Geller, behavioral economist and the developer of the Money Anxiety Index, the similarities in the financial anxiety of consumers between the Coronavirus crisis and the September 11 crisis make it plausible that we will experience a similar economic cycle in the coming months.
The Money Anxiety Index is a behavioral economics predictor. It measures actual financial behavior of consumers rather than subjective responses to surveys. An analysis of the Money Anxiety Index during and after the September 11 crisis shows that the level of financial anxiety skyrocket 10.8 points in October 2001 right after the attack and continued to climb up for about 100 days thereafter. Since the initial money anxiety response of consumers to the Coronavirus and the September 11 crisis is identical, it is plausible that the Money Anxiety Index will start decreasing in mid-June of 2020.
“There are two kinds of economic crises,” said Geller. “There is a systemic economic crisis, which is what we had during the financial crisis of 2008/9, and there is a temporary economic crisis, which is what we experienced during September 11, 2001. The economic experience of the current Coronavirus crisis is likely to be similar to the September 11, 2001 experience.”
