Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/224010
Authors: 
Balleer, Almut
Link, Sebastian
Menkhoff, Manuel
Zorn, Peter
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13568
Abstract: 
We study price-setting behavior in German firm-level survey data to infer the relative importance of supply and demand during the Covid-19 pandemic. Supply and demand forces coexist, but demand shortages dominate in the short run. A reported negative impact of Covid-19 on current business is associated with a rise in the probability to decrease prices up to eleven percentage points. These results imply a role for aggregate demand stabilization policy to buffer the economic consequences of Covid-19 while containing the pandemic.
Subjects: 
producer price setting
supply
demand
COVID-19
fiscal policy
JEL: 
E31
E32
H50
E60
D22
Document Type: 
Working Paper

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