ABSTRACT
Purpose: The study focuses on examining the impact of the supply shock on the Indian macroeconomic variables during the COVID-19 period. Design/methodology/approach: Time-varying factor augmented vector autoregressive model has been employed to study the asymmetry in transmission of supply shock on Indian economy during pre- and post-COVID-19 times. Findings: The authors find that with supply shock, retail food inflation outpaced in COVID-19 times. Production levels reported by IIP fell to abysmally low levels in the post-COVID-19 times when the economy stalled. The liquidity stimulus provided by the central bank led to the negative response of policy rates to the supply shocks during the COVID-19 times. Originality/value: The study stands novel in examining the impact of COVID-19 pandemic on Indian economy through the lenses of asymmetric transmission of supply shock during pre- and post-COVID-19 times. © 2023, Emerald Publishing Limited.
ABSTRACT
We test interaction between the oil price shocks and inflation in the ASEAN5+3 countries utilizing 35 years of monthly data beginning in 1987–2022. We show that when the COVID-19 pandemic is factored into our sample, oil-specific demand shocks and aggregate demand shocks had a significant impact on inflation in these countries. These findings hint that the COVID-19 pandemic is likely the fundamental cause of the inflationary impact of these shocks. The impact of rising inflation sparked by shocks emanating from oil-specific demand and aggregate demand is evident in Malaysia, Singapore, Thailand, the Philippines, and Japan. We discover evidence that inflation responds asymmetrically to oil price shocks, depending on whether the shocks are positive or negative. Our empirical findings have significant policy implications for policymakers as they provide a reasonable explanation for the ASEAN5+3 countries' inflationary responses to various oil price shocks. © 2023 Elsevier Ltd
ABSTRACT
We analyze a large-scale survey of small business owners, managers, and employees in the United States to understand the effects of the COVID-19 pandemic on those businesses. We explore two waves of the survey that were fielded on Facebook in April 2020 and December 2020. We document five facts about the impact of the pandemic on small businesses. (1) Larger firms, older firms, and male-owned firms were more likely to remain open during the early stages of the pandemic with many of these heterogeneities persisting through the end of 2020. (2) At businesses that remained open, concerns about demand shocks outweighed concerns about supply shocks though the relative importance of supply shocks grew over time. (3) In response to the pandemic, almost a quarter of the firms reduced their prices with price reductions concentrated among businesses facing financial constraints and demand shocks;almost no firms raised prices. (4) Only a quarter of small businesses had access to formal sources of financing at the start of the pandemic, and access to formal financing affected how firms responded to the pandemic. (5) Increased household responsibilities affected the ability of managers and employees to focus on their work, whereas increased business responsibilities impacted their ability to take care of their household members. This effect persisted through December 2020 and was particularly strong for women and parents of school-aged children. We discuss how these facts inform our understanding of the economic effects of the COVID-19 pandemic and how they can help design policy responses to similar shocks. © 2022 INFORMS.
ABSTRACT
The article addresses financial troubles in French amateur football clubs and their origins. Previous literature has demonstrated that–in particular in French football–club bankruptcies are triggered by demand shocks. The present research intends highlighting the determinants of demand shocks on those clubs playing French amateur football top two tiers with a longitudinal analysis (2009/2010-2019/2020). Various exogenous elements that influence club demand (i.e. revenues) are taken on board, namely, macroeconomic variables, such as the variation of GDP growth rate between two football seasons, a dummy for the Covid-19 sanitary crisis, and a sport dummy for the effect of the French national team winning the 2018 male football World Cup. The latter is used to check a potential trickle-down effect on amateur elite football. None of these variables do explain demand shocks except if the heterogeneity of clubs’ economic models is taken into account. The determinants of shock demands appear to be clubs’ strategic orientations (towards win maximization vs. a stable economic organization). © 2022 Informa UK Limited, trading as Taylor & Francis Group.
ABSTRACT
This paper investigates the influence of oil demand, oil supply, and risk-driven shocks on the yield curve in the US between 1995 and 2020. The US term-structure shape is modeled by three structural factors, the level, slope, and curvature. Their empirical analysis is performed according to the Diebold-Li modified variant of the widely used Nelson-Siegel model. The technique of wavelet analysis allows investigating the interrelation of shocks in oil prices and the US yield curve along time and frequency domains, simultaneously. We report on low, medium, and high coherence zones, relative to the oil price movements and the changes in the three yield-curve factors. The low coherence intervals indicate the potential for the three latent factors to be used for creating diversification strategies capable of hedging adverse dynamics in the oil market, potentially workable through global crises. We document the variability of dynamic patterns observable for the US sovereign yield factors on per-type-of-shock basis, evidencing the potential role of the US sovereign debt investments for designing cross-asset hedge strategies for commodity and fixed-income markets.
ABSTRACT
This paper investigates the impact of different oil price shocks on systemic risk under different market conditions. We show that the negative impact of negative oil price shocks on systemic risk is greater than the positive impact of positive oil price shocks. Systemic risk is always negatively affected by oil-specific demand shocks but positively affected by oil supply shocks when the market is under medium and low systemic risk levels. By testing the effect of crises, we find that the influence of positive and negative oil price shocks on systemic risk was declined due to the COVID-19 pandemic. © 2022 Elsevier B.V.
ABSTRACT
We investigate the prices and quantities of face masks when the 2020 COVID-19 pandemic was particularly serious to understand the impact of demand shocks on the cost of living index (COLI). Using a recently developed index number formula that is exact for the constant elasticity of substitution utility function with variable preferences, we quantified the degree of demand shock caused by the pandemic. Our empirical analysis revealed that shifts in preferences during the pandemic were so large that the COLI with variable tastes became very different from the standard superlative indexes. While the prices of face masks decreased in the Fisher index in May 2020 by 0.76% per week, the COLI increased by 1.92% per week.
ABSTRACT
Diewert and Fox (2022) examine various implications of the 2020 COVID-19 pandemic for constructing consumer price indexes. The authors state that the pandemic caused major changes in consumption expenditures and shares which makes fixed basket index number formulae inapplicable. They emphasize the need for more frequent surveys of consumer expenditure which will enable compilation of the Fisher index which is considered superior to the traditional Laspeyres or Young indexes. In addition, Diewert and Fox discuss the use of various “new” technologies such as web scraping, scanner data, and information from transactions through credit cards to estimate consumption expenditure.
ABSTRACT
We measure labor demand and supply shocks at the sector level around the COVID-19 outbreak by estimating a Bayesian structural vector autoregression on monthly statistics of hours worked and real wages. Most sectors were subject to large negative labor supply and demand shocks in March and April 2020, with substantial heterogeneity in the size of shocks across sectors. Our estimates suggest that two-thirds of the drop in the aggregate growth rate of hours in March and April 2020 are attributable to labor supply. We validate our estimates of supply shocks by showing that they are correlated with sectoral measures of telework.