{"id":8548,"date":"2020-07-09T09:15:20","date_gmt":"2020-07-09T08:15:20","guid":{"rendered":"http:\/\/www.economicsobservatory.com\/ongoing-research\/the-economic-effects-of-covid-19-and-credit-constraints-evidence-from-italian-firms-expectations-and-plans"},"modified":"2020-07-09T09:15:20","modified_gmt":"2020-07-09T08:15:20","slug":"the-economic-effects-of-covid-19-and-credit-constraints-evidence-from-italian-firms-expectations-and-plans","status":"publish","type":"ongoing-research","link":"https:\/\/www.economicsobservatory.com\/test\/ongoing-research\/the-economic-effects-of-covid-19-and-credit-constraints-evidence-from-italian-firms-expectations-and-plans","title":{"rendered":"The economic effects of Covid-19 and credit constraints: evidence from Italian firms&#039; expectations and plans"},"content":{"rendered":"<p>We investigate the economic effects of the Covid-19 pandemic and the role played by credit constraints in the transmission mechanism, using a novel survey of expectations and plans of Italian firms, taken just before and after the outbreak. Most firms revise downward their expectations for sales, orders, employment, and investment, while prices are expected to increase at a faster rate than previously anticipated, but there is geographical and sectoral heterogeneity in the magnitude of the effects. Importantly, we show that credit constraints amplify the effects on factor demand and sales of the shocks associated with Covid-19. Moreover, credit-constrained firms expect to charge higher prices, relative to unconstrained firms. The search for and availability of liquidity is a key determinant of firms\u2019 plans. Finally, there is evidence that both supply and demand shocks play a role in shaping firms\u2019 expectations and plans, with supply shocks being slightly more important in the aggregate.<\/p>\n<p><\/p>\n","protected":false},"template":"","categories":[],"frequency":[],"type_of_data":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The economic effects of Covid-19 and credit constraints: evidence from Italian firms&#039; expectations and plans - Economics Observatory<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.economicsobservatory.com\/test\/ongoing-research\/the-economic-effects-of-covid-19-and-credit-constraints-evidence-from-italian-firms-expectations-and-plans\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The economic effects of Covid-19 and credit constraints: evidence from Italian firms&#039; expectations and plans - Economics Observatory\" \/>\n<meta property=\"og:description\" content=\"We investigate the economic effects of the Covid-19 pandemic and the role played by credit constraints in the transmission mechanism, using a novel survey of expectations and plans of Italian firms, taken just before and after the outbreak. 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