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Europe > Latvia, Republic of

You are looking at 1 - 2 of 2 items for :

  • Type: Journal Issue x
  • Forecasting and Simulation: Models and Applications x
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Cover IMF Working Papers
Show Me the Money: Tracking Consumer Spending with Daily Card Transaction Data During the Pandemic
Mr. Serhan Cevik
The COVID-19 pandemic has been an unprecedented shock to economic activity with abrupt and unexpected changes in household consumption behavior. This paper investigates how the spread of the pandemic and government interventions have affected consumer spending using daily card transaction data in the Baltics. The analysis shows significant effects on the amount and composition of debit and credit card transactions. First, the number of new COVID-19 infections or deaths has a strongly negative effect. Second, while public health measures designed to contain the spread of the pandemic has a negative effect, economic support measures designed to assist businesses and households have a stimulative effect. Third, there is heterogeneity across spending categories, but the drop is mostly concentrated in sectors that are restricted by lockdowns and the risk of infection. Fourth, the impact of government interventions, especially in terms of stimulating consumer spending, appears to be more pronounced on goods than services.
Keywords:
Pandemic; consumer spending; card transactions; Baltics; Estonia; Latvia; Lithuania; euro area; transition economies; household consumption behavior; credit card transactions; stimulating consumer spending; government intervention; consumer spending pattern; credit card transaction data; COVID-19; Consumer credit; Consumption; Household consumption
Cover IMF Working Papers
Unemployment Surges in the EU: The Role of Risk Premium Shocks
Mr. Bas B. Bakker
,
Marta Korczak
, and
Mr. Krzysztof Krogulski
In the last decade, over half of the EU countries in the euro area or with currencies pegged to the euro were hit by large risk premium shocks. Previous papers have focused on the impact of these shocks on demand. This paper, by contrast, focuses on the impact on supply. We show that risk premium shocks reduce the output level that maximizes profit. They also lead to unemployment surges, as firms are forced to cut costs when financing becomes expensive or is no longer available. As a result, all countries with risk premium shocks saw unemployment surge, even as euro area core countries managed to contain unemployment as firms hoarded labor during the downturn. Most striking, wage bills in euro area crisis countries and the Baltics declined even faster than GDP, whereas in core euro area countries wage shares actually increased.
Keywords:
WP; risk premium shock; risk premium; interest rate; GDP; Risk premia; interest rates; Euro area crisis; global economic; fincanial crisis; debt ratio; risk premium surge; unemployment surge; financing cost; Return on investment; Unemployment; Employment; Sovereign bonds; Baltics