Demand and Supply Shocks : Evidence from Corporate Earning Calls
This paper quantifies global demand, supply, and uncertainty shocks and compares two major global recessions: the 2008–09 Great Recession and the COVID-19 pandemic. Two alternative approaches are used to decompose economic shocks: text mining techniques on earning call transcripts and a structural Bayesian vector autoregression model. The results highlight sharp contrast in the size of supply and demand shocks over time and across sectors. While the Great Recession was characterized by demand shocks, COVID-19 caused sizable disruptions to both demand and supply. These shocks were broad-based with varying relative importance across major sectors. Furthermore, certain sub-sectors, such as professional and business services, internet retail, and grocery/department stores, fared better than others during the pandemic. The results imply that both targeted policies and conventional countercyclical fiscal and monetary policy can accelerate the economic recovery. Large demand shocks highlight an environment of deficient demand with countercyclical policy calibrated to the size of these shocks.
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Format: | Working Paper biblioteca |
Language: | English |
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World Bank, Washington, DC
2022-02
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Subjects: | SUPPLY SHOCK, DEMAND SHOCK, UNCERTAINTY, STOCK MARKET, SENTIMENT, CORONAVIRUS, COVID-19, PANDEMIC IMPACT, GREAT RECESSION, |
Online Access: | http://documents.worldbank.org/curated/en/299521643742060995/Demand-and-Supply-Shocks-Evidence-from-Corporate-Earning-Calls http://hdl.handle.net/10986/36923 |
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dig-okr-10986369232022-02-04T05:10:39Z Demand and Supply Shocks : Evidence from Corporate Earning Calls Ruch, Franz Ulrich Taskin, Temel SUPPLY SHOCK DEMAND SHOCK UNCERTAINTY STOCK MARKET SENTIMENT CORONAVIRUS COVID-19 PANDEMIC IMPACT GREAT RECESSION This paper quantifies global demand, supply, and uncertainty shocks and compares two major global recessions: the 2008–09 Great Recession and the COVID-19 pandemic. Two alternative approaches are used to decompose economic shocks: text mining techniques on earning call transcripts and a structural Bayesian vector autoregression model. The results highlight sharp contrast in the size of supply and demand shocks over time and across sectors. While the Great Recession was characterized by demand shocks, COVID-19 caused sizable disruptions to both demand and supply. These shocks were broad-based with varying relative importance across major sectors. Furthermore, certain sub-sectors, such as professional and business services, internet retail, and grocery/department stores, fared better than others during the pandemic. The results imply that both targeted policies and conventional countercyclical fiscal and monetary policy can accelerate the economic recovery. Large demand shocks highlight an environment of deficient demand with countercyclical policy calibrated to the size of these shocks. 2022-02-03T15:43:27Z 2022-02-03T15:43:27Z 2022-02 Working Paper http://documents.worldbank.org/curated/en/299521643742060995/Demand-and-Supply-Shocks-Evidence-from-Corporate-Earning-Calls http://hdl.handle.net/10986/36923 English Policy Research Working Paper;No. 9922 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper |
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SUPPLY SHOCK DEMAND SHOCK UNCERTAINTY STOCK MARKET SENTIMENT CORONAVIRUS COVID-19 PANDEMIC IMPACT GREAT RECESSION SUPPLY SHOCK DEMAND SHOCK UNCERTAINTY STOCK MARKET SENTIMENT CORONAVIRUS COVID-19 PANDEMIC IMPACT GREAT RECESSION |
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SUPPLY SHOCK DEMAND SHOCK UNCERTAINTY STOCK MARKET SENTIMENT CORONAVIRUS COVID-19 PANDEMIC IMPACT GREAT RECESSION SUPPLY SHOCK DEMAND SHOCK UNCERTAINTY STOCK MARKET SENTIMENT CORONAVIRUS COVID-19 PANDEMIC IMPACT GREAT RECESSION Ruch, Franz Ulrich Taskin, Temel Demand and Supply Shocks : Evidence from Corporate Earning Calls |
description |
This paper quantifies global demand,
supply, and uncertainty shocks and compares two major global
recessions: the 2008–09 Great Recession and the COVID-19
pandemic. Two alternative approaches are used to decompose
economic shocks: text mining techniques on earning call
transcripts and a structural Bayesian vector autoregression
model. The results highlight sharp contrast in the size of
supply and demand shocks over time and across sectors. While
the Great Recession was characterized by demand shocks,
COVID-19 caused sizable disruptions to both demand and
supply. These shocks were broad-based with varying relative
importance across major sectors. Furthermore, certain
sub-sectors, such as professional and business services,
internet retail, and grocery/department stores, fared better
than others during the pandemic. The results imply that both
targeted policies and conventional countercyclical fiscal
and monetary policy can accelerate the economic recovery.
Large demand shocks highlight an environment of deficient
demand with countercyclical policy calibrated to the size of
these shocks. |
format |
Working Paper |
topic_facet |
SUPPLY SHOCK DEMAND SHOCK UNCERTAINTY STOCK MARKET SENTIMENT CORONAVIRUS COVID-19 PANDEMIC IMPACT GREAT RECESSION |
author |
Ruch, Franz Ulrich Taskin, Temel |
author_facet |
Ruch, Franz Ulrich Taskin, Temel |
author_sort |
Ruch, Franz Ulrich |
title |
Demand and Supply Shocks : Evidence from Corporate Earning Calls |
title_short |
Demand and Supply Shocks : Evidence from Corporate Earning Calls |
title_full |
Demand and Supply Shocks : Evidence from Corporate Earning Calls |
title_fullStr |
Demand and Supply Shocks : Evidence from Corporate Earning Calls |
title_full_unstemmed |
Demand and Supply Shocks : Evidence from Corporate Earning Calls |
title_sort |
demand and supply shocks : evidence from corporate earning calls |
publisher |
World Bank, Washington, DC |
publishDate |
2022-02 |
url |
http://documents.worldbank.org/curated/en/299521643742060995/Demand-and-Supply-Shocks-Evidence-from-Corporate-Earning-Calls http://hdl.handle.net/10986/36923 |
work_keys_str_mv |
AT ruchfranzulrich demandandsupplyshocksevidencefromcorporateearningcalls AT taskintemel demandandsupplyshocksevidencefromcorporateearningcalls |
_version_ |
1756576043793121280 |