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

22 Pages Posted: 28 Jul 2020

See all articles by Lukas Buchheim

Lukas Buchheim

Ludwig Maximilian University of Munich (LMU)

Carla Krolage

ifo Institute

Sebastian Link

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute; Ludwig Maximilian University of Munich (LMU)

Multiple version iconThere are 2 versions of this paper

Date Written: 2020

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.

JEL Classification: E660, E320, H320, D220, D840

Suggested Citation

Buchheim, Lukas and Krolage, Carla and Link, Sebastian, Sudden Stop: When Did Firms Anticipate the Potential Consequences of COVID-19? (2020). CESifo Working Paper No. 8429, Available at SSRN: https://ssrn.com/abstract=3653954 or http://dx.doi.org/10.2139/ssrn.3653954

Lukas Buchheim (Contact Author)

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

Carla Krolage

ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

Sebastian Link

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

HOME PAGE: http://www.cesifo-group.de/portal/page/portal/ifoHome/f-about/f3aboutifo/50ifostaff/_ifocv_link_s

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

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