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COVID-19-Induced Shocks and Uncertainty

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  • Mirela Miescu
  • Raffaele Rossi
Abstract
Using statistical identification, we extract a COVID-19-induced shock by exploiting large daily jumps in financial markets caused by news about the pandemic. This shock depresses economic and financial indicators, increases risk and uncertainty measures, has sizeable distributional effects, and hits most harshly those industries relying on face-to-face interactions. Impulse response function analysis across various identification strategies leads us to interpret the statistical COVID-19-induced shock as a structural uncertainty shock.

Suggested Citation

  • Mirela Miescu & Raffaele Rossi, 2020. "COVID-19-Induced Shocks and Uncertainty," Economics Discussion Paper Series 2013, Economics, The University of Manchester, revised Aug 2021.
    • Handle: RePEc:man:sespap:2013
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    2. MORIKAWA Masayuki, 2022. "Uncertainty of Firms' Medium-term Outlook during the COVID-19 Pandemic," Discussion papers 22079, Research Institute of Economy, Trade and Industry (RIETI).
    3. Suyi Zheng & Jiandong Wen, 2023. "How Does Firm-Level Economic Policy Uncertainty Affect Corporate Innovation? Evidence from China," Sustainability, MDPI, vol. 15(7), pages 1-23, April.
    4. Dong, Xianjing & Zhang, Xiaojuan & Zhang, Congcong & Bi, Chunyu, 2023. "Building sustainability education for green recovery in the energy resource sector: A cross country analysis," Resources Policy, Elsevier, vol. 81(C).
    5. Deev, Oleg & Plíhal, Tomáš, 2022. "How to calm down the markets? The effects of COVID-19 economic policy responses on financial market uncertainty," Research in International Business and Finance, Elsevier, vol. 60(C).
    6. Débora De Esteban Escobar & Carmen De-Pablos-Heredero & José Luis Montes-Botella & Francisco José Blanco Jiménez & Antón García, 2022. "Business Incubators and Survival of Startups in Times of COVID-19," Sustainability, MDPI, vol. 14(4), pages 1-15, February.

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management

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