CEPR News
Klaus Adam, Erwan Gautier, Sergio Santoro, Henning Weber
This paper estimates the impact of technology sophistication pre-COVID-19 on the performance of firms during the early stages of the pandemic. We exploit unique data covering firms from Brazil, Senegal, and Vietnam using a treatment effect mediation framework to decompose the results into a direct and an indirect effect. Increasing pre-pandemic technology sophistication by one standard deviation is associated with 3.8pp higher sales. Both effects are positive, but the direct effect is about 5 times larger than the indirect effect. The total effect on sales is markedly nonlinear with significantly smaller estimates of the reduction in sales for firms with more sophisticated pre-pandemic technology. Our results are robust to different measures of digital responses and matching estimators.
You can now listen to a podcast where Klaus Adam tells Tim Phillips about this research.
VoxEU Talk
A positive inflation target for the euro area
Inflation reduces economic welfare by distorting demand. But what is the inflation rate that minimises these distortions? Maybe it's a lot higher than our models assume, Klaus Adam tells Tim Phillips.
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- Europe's nations and regions 
- EU policies 
- Inflation
