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Uncertainty in the Euro Area During the First Wave of the COVID-19 Pandemic

Author

Listed:
  • Stefan Schiman
  • Atanas Pekanov

    (WIFO)

Abstract
Uncertainty – a state in which assessing future conditions by economic agents is hampered – rose sharply during the current pandemic. A bout of uncertainty can have similar effects like an adverse demand shock, dampening private consumption, investment and, hence, inflation. According to our own estimations, however, the pandemic-induced spike of uncertainty has caused little macroeconomic damage so far. The introduction of PEPP was a quick and decisive action that stopped uncertainty from rising further and probably contained its adverse economic effects.

Suggested Citation

  • Stefan Schiman & Atanas Pekanov, 2020. "Uncertainty in the Euro Area During the First Wave of the COVID-19 Pandemic," WIFO Studies, WIFO, number 66708.
    • Handle: RePEc:wfo:wstudy:66708
    as

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    File URL: https://www.wifo.ac.at/wwa/pubid/66708
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