The rise in the cross-sectoral dispersion of earnings expectations during COVID-19

Joost Bats (), William Greif and Daniel Kapp

No 2664, Working Paper Series from European Central Bank

Abstract: This paper documents a durable increase in the cross-sectoral dispersion of earnings expectations during the COVID-19 crisis. The rise in dispersion of earnings forecasts can be explained by the introduction of lockdown measures, which had a particularly adverse impact on the travel sector. Accordingly, in terms of earnings expectations, countries that are relatively independent of the travel sector were least affected by a tightening of lockdowns. At the same time, vaccinations have been a game changer: more stringent lockdown measures added far less to the cross-sectoral dispersion in earnings expectations once vaccines started to be rolled out in late 2020. Going forward, the dispersion in earnings expectations continues to stand at elevated levels. JEL Classification: E44, G10, G12

Keywords: COVID-19; cross-sectoral dispersion; earnings expectations; lockdown measures; vaccinations (search for similar items in EconPapers)
Date: 2022-05
New Economics Papers: this item is included in nep-mac
Note: 1884807
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Citations: View citations in EconPapers (1)

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