The role of profit margins in the adjustment to the COVID-19 shock

Elke Hahn

Economic Bulletin Boxes, 2021, vol. 2

Abstract: Profit margins are an integral part of domestic price setting and have had an impact on the response of euro area inflation to the COVID-19 shock. While profits have fallen more strongly during the COVID-19 crisis than during earlier recessions, profit margins have shown an unusually high degree of resilience relative to the depth of the recession. The resilience of profit margins likely reflects the normal resilience of profit margins observed in recessions and, in addition, the impact of job retention schemes. JEL Classification: E31

Keywords: COVID-19 crisis; Profit margins; recession (search for similar items in EconPapers)
Date: 2021-03
Note: 854549
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Citations: View citations in EconPapers (2)

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