Demand and Supply Shocks : Evidence from Corporate Earning Calls

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 techn...

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Main Authors: Ruch, Franz Ulrich, Taskin, Temel
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2022
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
id okr-10986-36923
recordtype oai_dc
spelling okr-10986-369232022-02-04T05:10:39Z 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
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic SUPPLY SHOCK
DEMAND SHOCK
UNCERTAINTY
STOCK MARKET
SENTIMENT
CORONAVIRUS
COVID-19
PANDEMIC IMPACT
GREAT RECESSION
spellingShingle 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
relation Policy Research Working Paper;No. 9922
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
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
url http://documents.worldbank.org/curated/en/299521643742060995/Demand-and-Supply-Shocks-Evidence-from-Corporate-Earning-Calls
http://hdl.handle.net/10986/36923
_version_ 1764486172242870272

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