Working Papers
Amidst the global turmoil brought about by the COVID-19 pandemic, the International Monetary Fund (IMF) responded swiftly by extending lending assistance to a large number of member countries. In contrast to earlier crises, where financial assistance was typically channeled through conventional IMF lending instruments whose disbursements are contingent upon the implementation of specific policy measures, the response to the COVID-19 pandemic involved the deployment of emergency financing instruments that do not come with strings attached and can be disbursed upfront. Despite the absence of traditional conditionality, empirical evidence suggests that IMF emergency financing played a pivotal role in catalyzing additional external financial resources. For middle-income developing countries, this primarily translated into augmented net private portfolio inflows, while low-income developing countries saw increased financial support from development partners.
We identify supply and demand shocks to the real price of natural gas, leveraging exogenous temperature variation and a high-frequency news-based strategy. Gas demand is less elastic than supply, leading to larger price fluctuations following supply shocks. These shocks have notable macroeconomic effects: strongly inflationary in the Euro Area, amplified by inventory dynamics and financial volatility, suggesting a transmission channel driven by expectations and uncertainty. They were a major driver of the recent inflation surge, though effects were more muted in the U.S. Aggregate real effects appear short-lived, though we document notable sectoral heterogeneity and a substantial decline in German activity.