EXPLORING THE MODERATING ROLE OF FINANCIAL LITERACY IN THE NEXUS OF FINANCIAL FRAGILITY AND FINANCIAL OPTIMISM: POST COVID-19 ANALYSIS FROM PAKISTAN

Abstract

The primary goal of this study is to scrutinize the influence of financial fragility on financial optimism following the COVID-19 epidemic. The study also explores the moderating role of financial literacy in the nexus of financial fragility and optimism. We select 260 households residing in the urban area of Pakistan by using a simple random sampling technique. We collect primary data regarding variables through structured questionnaires. According to the multiple regression technique's results, there is a negative correlation between financial fragility and financial optimism, indicating that households with high levels of fragility are less optimistic.  In addition, we also find that financial literacy significantly reduced the negative impact of financial fragility on financial optimism. The results of the study recommend that the government and policymakers initiate psychological counseling and financial literacy programs for people during financially vulnerable conditions. .

Keywords

Financial Fragility, Financial Optimism, Financial Literacy