The impact of COVID-19 on potential output in the euro area. 10/11/2020
Bodnar, Katalin ; Le Roux, Julien ; Lopez-Garcia, Paloma ; Szörfi, Béla
2020
7/2020
21 p.
epidemic disease ; economic recession ; business cycle ; structural change ; economic policy
Business economics
English
"The coronavirus (COVID-19) pandemic almost certainly affected potential output negatively via various channels, affecting the trends of total factor productivity, capital and labour. Quantitative estimates show that euro area potential growth will likely stall or even decline in 2020 and the pace of the recovery is highly uncertain, as it depends on whether the shock is temporary or persistent. Comprehensive policy measures are playing a crucial role in preventing hysteresis in the euro area economy and long-term economic scarring."
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