The macroeconomic impact of the COVID-19 pandemic in the euro area

Olga Croitorov, Giulia Filippeschi, Mirko Licchetta, Philipp Pfeiffer, Adriana Reut, Wouter Simons, Anna Thum-Thysen, Anneleen Vandeplas and Lukas Vogel

Quarterly Report on the Euro Area (QREA), 2021, vol. 20, issue 2, 7-16

Abstract: The COVID-19 pandemic brought about a sharp contraction in economic activity in 2020, through an exogenous shock that hit the euro area and the global economy. This section discusses the macroeconomic impact of the COVID-19 pandemic in the euro area and highlights how uneven the contraction of economic activity has been across sectors, with a much stronger negative impact on activities requiring physical interaction. It also analyses how the unprecedented policy response has cushioned the socio-economic impact of the shock. However, there remains significant uncertainty over the long-term economic impact of COVID-19 and potential subsequent damages to potential GDP through capital, technology and labour market channels. On the upside, the current crisis may help to speedup the digital and green transitions. Some policy implications for the euro area are also presented.

Keywords: COVID-19; scarring risks; corporate stress; sectoral impact; policy response (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:euf:qreuro:0202-01

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