Subjective Uncertainty in Firms' Economic Outlook during the COVID-19 Crisis

This study, using data from an original firm survey and government statistics, analyzes firms' subjective uncertainty during the COVID-19 crisis. The contributions to the literature are (1) the measurement of firms' uncertainty in their mid-term economic outlook as subjective confidence intervals, and (2) the comparison of firms' subjective uncertainty in the COVID-19 crisis with that of past shocks including the Global Financial Crisis. The results indicate that firms' subjective uncertainty increased substantially after the outbreak of the COVID-19 pandemic. Compared with the period of the Global Financial Crisis, deterioration of the economic outlook during the COVID-19 crisis was less severe, but the increase in the subjective uncertainty has been far larger, indicating that the COVID-19 crisis can be characterized as a severe uncertainty shock.

The English version of this paper is 21-E-042.