Cross-country Evidence on the Allocation of COVID-19 Government Subsidies and Consequences for Productivity
Journal of the Japanese and International Economies,
We study the consequences of the Covid-19 pandemic and related policy support on productivity. We employ an extensive micro-distributed exercise to access otherwise unavailable individual data on firm performance and government subsidies. Our cross-country evidence for five EU countries shows that the pandemic led to a significant short-term decline in aggregate productivity and the direct support to firms had only a limited positive effect on productivity developments. A thorough comparative analysis of the distribution of employment and overall direct subsidies, considering separately also relative firm-level size of support and the probability of being supported, reveals ambiguous cross-country results related to the firm-level productivity and points to the decisive role of other firm characteristics.
European Real Estate Markets During the Pandemic: Is COVID-19 also a Case for House Price Concerns?
IWH Policy Notes,
We use a new database on European real estate purchase and rental prices – the IWH European Real Estate Index – to document the relationship between staggered COVID-19 dynamics and real estate prices in 14 EU countries between January 2020 and December 2021. For most countries, we find no statistically significant response of monthly purchase and rental prices due to an increase of regional COVID-19 cases. For the UK we find that more COVID-19 cases depressed both purchase and rental prices significantly, but the economic magnitude of effects was mild during this sample period. In contrast, rents in Italy increased in response to hiking COVID-19 cases, illustrating the importance to consider heterogeneous crisis patterns across the EU when designing policies. Overall, COVID-19 dynamics did not affect real estate values significantly during the pandemic, thereby mitigating potential financial stability concerns via a mortgage lending channel at the time.
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