Uncertainty and the pandemic shocks

The COVID-19 pandemic shocks are a significant source of uncertainty in several aspects. In particular, these shocks influence the landscape, in which policymakers operate, and create further uncertainty about policy decisions and about their effectiveness. The aim of this paper is to offer some relative measures of the uncertainty caused by the pandemic, and to discuss the impact of this uncertainty on the possible evolution of European economies during the second wave of COVID-19. Emphasis will be placed on the effectiveness of the policies implemented. This document was provided by the Policy Department for Economic, Scientific and Quality of Life Policies at the request of the committee on Economic and Monetary Affairs (ECON) ahead of the Monetary Dialogue with the ECB President on 19 November 2020.