Sudden Stop: When Did Firms Anticipate the Potential Consequences of COVID-19?

Lukas Buchheim, Carla Krolage () and Sebastian Link
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Carla Krolage: Ifo Institute for Economic Research

No 13457, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 when the spread of the COVID-19 pandemic led to domestic policy changes: The announcement of nation-wide school closures on March 13 caused by far the largest change in business perceptions. In contrast, business perceptions hardly reacted to any other potential source of information: 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: COVID-19; expectations; uncertainty; policy; firms (search for similar items in EconPapers)
JEL-codes: D22 D84 E32 E66 H32 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2020-07
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (11)

Published - published in: German Economic Review, 2022, 23 (1), 79-119

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Related works:
Journal Article: Sudden stop: When did firms anticipate the potential consequences of COVID-19? (2022)
Working Paper: Sudden Stop: When Did Firms Anticipate the Potential Consequences of Covid-19? (2020)
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