Uncertainty in the Euro Area During the First Wave of the COVID-19 Pandemic

Stefan Schiman and Atanas Pekanov
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Atanas Pekanov: WIFO

in WIFO Studies from WIFO

Abstract: Uncertainty – a state in which assessing future conditions by economic agents is hampered – rose sharply during the current pandemic. A bout of uncertainty can have similar effects like an adverse demand shock, dampening private consumption, investment and, hence, inflation. According to our own estimations, however, the pandemic-induced spike of uncertainty has caused little macroeconomic damage so far. The introduction of PEPP was a quick and decisive action that stopped uncertainty from rising further and probably contained its adverse economic effects.

Keywords: Uncertainty; COVID-19; Monetary Policy; Inflation; Inflation target (search for similar items in EconPapers)
Date: 2020 Written 2021-01-13
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Persistent link: https://EconPapers.repec.org/RePEc:wfo:wstudy:66708

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