Department of Economics and Business Economics

The Cost of Coronavirus Uncertainty: The High Returns to Clear Policy Plans

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The Cost of Coronavirus Uncertainty : The High Returns to Clear Policy Plans. / Pellegrino, Giovanni; Ravenna, Federico; Züllig, Gabriel.

In: Australian Economic Review, Vol. 53, No. 3, 09.2020, p. 397-401.

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

Harvard

Pellegrino, G, Ravenna, F & Züllig, G 2020, 'The Cost of Coronavirus Uncertainty: The High Returns to Clear Policy Plans', Australian Economic Review, vol. 53, no. 3, pp. 397-401. https://doi.org/10.1111/1467-8462.12383

APA

CBE

MLA

Pellegrino, Giovanni, Federico Ravenna and Gabriel Züllig. "The Cost of Coronavirus Uncertainty: The High Returns to Clear Policy Plans". Australian Economic Review. 2020, 53(3). 397-401. https://doi.org/10.1111/1467-8462.12383

Vancouver

Author

Pellegrino, Giovanni ; Ravenna, Federico ; Züllig, Gabriel. / The Cost of Coronavirus Uncertainty : The High Returns to Clear Policy Plans. In: Australian Economic Review. 2020 ; Vol. 53, No. 3. pp. 397-401.

Bibtex

@article{b616b642f01943828528d91cd3177f08,
title = "The Cost of Coronavirus Uncertainty: The High Returns to Clear Policy Plans",
abstract = "Policymakers face an extremely uncertain environment during COVID-19. Using a nonlinear VAR estimate for the Euro Area, we argue that the benefit of reducing policy uncertainty at a time dominated by pessimistic expectations amounts to several points of GDP. The impact on the economy of uncertainty shocks is much larger during periods of negative outlook for the future. We estimate the impact on industrial production of the current COVID-19 induced uncertainty to peak at a year-over-year growth loss of −15.4 per cent in September 2020, and to lead to a fall in CPI inflation between 1 per cent and 1.5 per cent. Policies providing state-contingent scenarios ready to be adopted if the worst-case outcomes materialise can reduce the impact of uncertainty.",
author = "Giovanni Pellegrino and Federico Ravenna and Gabriel Z{\"u}llig",
year = "2020",
month = sep,
doi = "10.1111/1467-8462.12383",
language = "English",
volume = "53",
pages = "397--401",
journal = "Australian Economic Review",
issn = "0004-9018",
publisher = "Wiley",
number = "3",

}

RIS

TY - JOUR

T1 - The Cost of Coronavirus Uncertainty

T2 - The High Returns to Clear Policy Plans

AU - Pellegrino, Giovanni

AU - Ravenna, Federico

AU - Züllig, Gabriel

PY - 2020/9

Y1 - 2020/9

N2 - Policymakers face an extremely uncertain environment during COVID-19. Using a nonlinear VAR estimate for the Euro Area, we argue that the benefit of reducing policy uncertainty at a time dominated by pessimistic expectations amounts to several points of GDP. The impact on the economy of uncertainty shocks is much larger during periods of negative outlook for the future. We estimate the impact on industrial production of the current COVID-19 induced uncertainty to peak at a year-over-year growth loss of −15.4 per cent in September 2020, and to lead to a fall in CPI inflation between 1 per cent and 1.5 per cent. Policies providing state-contingent scenarios ready to be adopted if the worst-case outcomes materialise can reduce the impact of uncertainty.

AB - Policymakers face an extremely uncertain environment during COVID-19. Using a nonlinear VAR estimate for the Euro Area, we argue that the benefit of reducing policy uncertainty at a time dominated by pessimistic expectations amounts to several points of GDP. The impact on the economy of uncertainty shocks is much larger during periods of negative outlook for the future. We estimate the impact on industrial production of the current COVID-19 induced uncertainty to peak at a year-over-year growth loss of −15.4 per cent in September 2020, and to lead to a fall in CPI inflation between 1 per cent and 1.5 per cent. Policies providing state-contingent scenarios ready to be adopted if the worst-case outcomes materialise can reduce the impact of uncertainty.

UR - http://www.scopus.com/inward/record.url?scp=85090887352&partnerID=8YFLogxK

U2 - 10.1111/1467-8462.12383

DO - 10.1111/1467-8462.12383

M3 - Journal article

AN - SCOPUS:85090887352

VL - 53

SP - 397

EP - 401

JO - Australian Economic Review

JF - Australian Economic Review

SN - 0004-9018

IS - 3

ER -