Sudden stop: When did firms anticipate the potential consequences of COVID-19?

Lukas Buchheim, Krolage Carla () and Sebastian Link
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Krolage Carla: 123151 LMU Munich, Munich, Germany

German Economic Review, 2022, vol. 23, issue 1, 79-119

Abstract: COVID-19 hit firms by surprise. In a high frequency, representative panel of German firms, the business outlook declined and business uncertainty increased only at the time when the spread of the COVID-19 pandemic led to domestic policy changes: The announcement of nation-wide school closures on March 13 was followed by the largest change in business perceptions by far. In contrast, the data provides no evidence for the relevance of other potential sources of information on business perceptions: Firms did not learn from foreign policy measures, even if they relied on inputs from China or Italy. The local, county-level spread of COVID-19 cases affected expectations and uncertainty, albeit to a much lesser extent than the domestic policy changes.

Keywords: expectations; uncertainty; policy; COVID-19; firms (search for similar items in EconPapers)
JEL-codes: D22 D84 E32 E66 H32 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Sudden Stop: When Did Firms Anticipate the Potential Consequences of Covid-19? (2020)
Working Paper: Sudden Stop: When Did Firms Anticipate the Potential Consequences of COVID-19? (2020)
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DOI: 10.1515/ger-2020-0139

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