- Published
- 2022-04-28
- Venue
- American Economic Review, vol. 112, no. 5, pp. 1437-1474
- Cited by
- 485
- Open access
- No free copy found
- DOI
- 10.1257/aer.20201063
Abstract
Motivated by the effects of the COVID-19 pandemic, we present a theory of Keynesian supply shocks: shocks that reduce potential output in a sector of the economy, but that, by reducing demand in other sectors, ultimately push aggregate activity below potential. A Keynesian supply shock is more likely when the elasticity of substitution between sectors is relatively low, the intertemporal elasticity of substitution is relatively high, and markets are incomplete. Fiscal policy can display a smaller multiplier, but the insurance benefit of fiscal transfers can be enhanced. Firm exits and job destruction can amplify and propagate the shock. (JEL D52, E23, E24, E32, E62, I12, I18)
Cite this paper
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- APA 7
Guerrieri, V., Lorenzoni, G., Straub, L., & Werning, I. (2022). Macroeconomic Implications of COVID-19: Can Negative Supply Shocks Cause Demand Shortages? American Economic Review, 112(5), 1437–1474. https://doi.org/10.1257/aer.20201063
- MLA 9
Guerrieri, Veronica, et al. "Macroeconomic Implications of COVID-19: Can Negative Supply Shocks Cause Demand Shortages?" American Economic Review, vol. 112, no. 5, 2022, pp. 1437–1474, https://doi.org/10.1257/aer.20201063.
- Chicago
Guerrieri, Veronica, Guido Lorenzoni, Ludwig Straub, and Iván Werning. "Macroeconomic Implications of COVID-19: Can Negative Supply Shocks Cause Demand Shortages?" American Economic Review 112, no. 5 (2022): 1437–1474. https://doi.org/10.1257/aer.20201063.
- GOST
Guerrieri V., Lorenzoni G., Straub L. [и др.] Macroeconomic Implications of COVID-19: Can Negative Supply Shocks Cause Demand Shortages? // American Economic Review. — 2022. — Vol. 112, № 5. — P. 1437–1474. — URL: https://doi.org/10.1257/aer.20201063
- BibTeX
@article{guerrieri2022macroeconomic, title = {{Macroeconomic Implications of COVID-19: Can Negative Supply Shocks Cause Demand Shortages?}}, author = {Veronica Guerrieri and Guido Lorenzoni and Ludwig Straub and Iván Werning}, journal = {American Economic Review}, year = {2022}, volume = {112}, number = {5}, pages = {1437--1474}, doi = {10.1257/aer.20201063}, url = {https://doi.org/10.1257/aer.20201063} }- RIS
TY - JOUR AU - Guerrieri, Veronica AU - Lorenzoni, Guido AU - Straub, Ludwig AU - Werning, Iván TI - Macroeconomic Implications of COVID-19: Can Negative Supply Shocks Cause Demand Shortages? JO - American Economic Review VL - 112 IS - 5 SP - 1437 EP - 1474 PY - 2022 DA - 2022/04/28 DO - 10.1257/aer.20201063 UR - https://doi.org/10.1257/aer.20201063 ER -