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The rise in the cross-sectoral dispersion of earnings expectations during COVID-19

Author

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  • Bats, Joost
  • Greif, William
  • Kapp, Daniel

Abstract

This paper documents a durable increase in the cross-sectoral dispersion of earnings expectations during the COVID-19 crisis. The rise in dispersion of earnings forecasts can be explained by the introduction of lockdown measures, which had a particularly adverse impact on the travel sector. Accordingly, in terms of earnings expectations, countries that are relatively independent of the travel sector were least affected by a tightening of lockdowns. At the same time, vaccinations have been a game changer: more stringent lockdown measures added far less to the cross-sectoral dispersion in earnings expectations once vaccines started to be rolled out in late 2020. Going forward, the dispersion in earnings expectations continues to stand at elevated levels. JEL Classification: E44, G10, G12

Suggested Citation

  • Bats, Joost & Greif, William & Kapp, Daniel, 2022. "The rise in the cross-sectoral dispersion of earnings expectations during COVID-19," Working Paper Series 2664, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20222664
    Note: 1884807
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    References listed on IDEAS

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    Cited by:

    1. Maran, Raluca, 2022. "Reaction of the Philippine stock market to domestic monetary policy surprises: an event study approach," MPRA Paper 114855, University Library of Munich, Germany.

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    More about this item

    Keywords

    COVID-19; cross-sectoral dispersion; earnings expectations; lockdown measures; vaccinations;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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