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The macroeconomic impact of the COVID-19 pandemic in the euro area

Author

Listed:
  • Olga Croitorov
  • Giulia Filippeschi
  • Mirko Licchetta
  • Philipp Pfeiffer
  • Adriana Reut
  • Wouter Simons
  • Anna Thum-Thysen
  • Anneleen Vandeplas
  • Lukas Vogel

Abstract

The COVID-19 pandemic brought about a sharp contraction in economic activity in 2020, through an exogenous shock that hit the euro area and the global economy. This section discusses the macroeconomic impact of the COVID-19 pandemic in the euro area and highlights how uneven the contraction of economic activity has been across sectors, with a much stronger negative impact on activities requiring physical interaction. It also analyses how the unprecedented policy response has cushioned the socio-economic impact of the shock. However, there remains significant uncertainty over the long-term economic impact of COVID-19 and potential subsequent damages to potential GDP through capital, technology and labour market channels. On the upside, the current crisis may help to speedup the digital and green transitions. Some policy implications for the euro area are also presented.

Suggested Citation

  • Olga Croitorov & Giulia Filippeschi & Mirko Licchetta & Philipp Pfeiffer & Adriana Reut & Wouter Simons & Anna Thum-Thysen & Anneleen Vandeplas & Lukas Vogel, 2021. "The macroeconomic impact of the COVID-19 pandemic in the euro area," Quarterly Report on the Euro Area (QREA), Directorate General Economic and Financial Affairs (DG ECFIN), European Commission, vol. 20(2), pages 7-16, July.
    • Handle: RePEc:euf:qreuro:0202-01
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    Cited by:

    1. Bogdan Muraraşu & Cristina Anghelescu & Robert Adrian Grecu, 2023. "Assessing fiscal multipliers in times of crisis: evidence from selected CEE countries," Empirical Economics, Springer, vol. 65(4), pages 1627-1654, October.

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