The Impact of COVID on Potential Output

John Fernald () and Huiyu Li

No 2021-09, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: The level of potential output is likely to be subdued post-COVID relative to its previous estimates. Most clearly, capital input and full-employment labor will both be lower than they previously were. Quantitatively, however, these effects appear relatively modest. In the long run, labor scarring could lead to lower levels of employment, but the slow pre-recession pace of GDP growth is unlikely to be substantially affected.

Keywords: Growth accounting; productivity; potential output; covid-19 (search for similar items in EconPapers)
JEL-codes: E01 E23 E24 O47 (search for similar items in EconPapers)
Pages: 30
Date: 2021-03-22
New Economics Papers: this item is included in nep-eff and nep-mac
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DOI: 10.24148/wp2021-09

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