Virus Uncertainty Can Muffle Policy Impact: Jackson Hole Paper
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“Massive” levels of uncertainty created by the coronavirus pandemic are unlikely to subside anytime soon, further curbing growth as consumers and businesses remain on the sidelines, according to a paper presented by economists Jose Barrero and Nick Bloom.
The impact of uncertainty on businesses and consumers has already reduced growth by 2% to 4% and will likely decrease hiring, investment and make changes to fiscal and monetary policy less effective, the two wrote in a paper presented Friday at the Kansas City Federal Reserve’s 2020 Economic Policy Symposium. The annual event, usually held in Jackson Hole, Wyoming, is being conducted via video conference this year due to the virus.