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Is healthcare employment recession‐proof? We examine the long‐standing hypothesis that healthcare employment is stable across the business cycle. We explicitly distinguish between negative aggregate demand and supply shocks in studying how healthcare employment responds to recessions, and show that this response depends largely on the type of the exogenous shock triggering the recession. First, aggregate healthcare employment responds procyclically during demand‐induced recessions but remains stable during supply‐induced recessions. Second, healthcare utilization drops significantly during demand‐induced recessions, explaining the decline in healthcare employment during these periods. Finally, there is significant heterogeneity in the employment responses of the healthcare sub‐sectors. While healthcare employment in most sub‐sectors responds procyclically during recessions caused by both negative demand and supply shocks, it responds countercyclically in nursing‐dominant sectors. Importantly, by isolating the recessionary impact of negative aggregate demand shocks from supply shocks on healthcare employment, we provide new empirical evidence that healthcare employment, in general, is not recession‐proof. [ABSTRACT FROM AUTHOR]

In recent years, a lot of empirical effort has been made to search for potential nonlinear responses of house prices to various demand and supply factors. This paper examines Poland's heterogeneous regional housing market reactions to key economic variables from 2000 to 2022. The study raises two research questions related to the asymmetric adjustment of housing markets to selected demand and supply shocks.

The COVID-19 pandemic has given rise to a spike in financial market volatility. In this paper, we attempt to assess the effects of financial & news-driven uncertainty shocks in growing Asian economies, using country-specific bond volatility shocks as a measure of local interest rate uncertainty. Also, we contrast the effects of local uncertainty with global stock market uncertainty. Using bond market data from nine Asian markets, we uncover a transmission mechanism of uncertainty shocks via the bond market. The mechanism works as a crowding-out effect due to government-led excessive market borrowing with supply-side consequences for the private sector, as opposed to economic policy or global stock market uncertainty which works more like a demand shock as in the literature. We conclude that countries with growing fiscal deficits that entail a larger government bond market or higher current account deficits, tend to experience an increase in the cost of borrowing due to this bond market volatility or interest rate uncertainty shocks. [ABSTRACT FROM AUTHOR]

We examine how firms adjusted their open innovation strategy in response to the 2008 global financial crisis. While previous research has analysed the advantages, drawbacks, and methods of open innovation, less is known about how firms adjust their open innovation strategy in response to major economic shocks. Guided by theories of organisational learning and behavioural theory of the firm, we examine the impact of demand shock on firm openness to external knowledge. To test our hypotheses, we analyse a unique dataset on innovation in Swiss firms during the financial crisis. Our findings show that firms persisted with open innovation during the crisis, but the nature of the shock had a differential effect on how firms searched for external knowledge. This research contributes to a better understanding of the role of open innovation in times of crisis and provides insights into how firms adjust their innovation strategies in response to economic shocks. [ABSTRACT FROM AUTHOR]

This paper develops a short period, one sector, Sraffa-Keynes model that can be used for the evaluation of various recommendations outlined in the Post Keynesian monetary policy literature. The model is characterised by the principle of effective demand, Sraffa or target-return pricing (which integrates the determination of key distributive variables and allows for short run cyclical variation in prices), conflict inflation, endogenous money and a basic approach to monetary policy in the Smithin–Wray tradition of fixing the policy rate to achieve low or specified rates of unemployment. The model is calibrated to the Australian economy and subjected to two standard macroeconomic shocks, a demand shock and a cost shock. After each shock, the economy returns to long period equilibrium characterised by the achievement of the target rate of return, desired capacity utilisation and Sraffian prices of production. Active monetary policy that targets employment, reduces the depth and duration of recessions in this model compared to a ‘park-it’ approach but at the cost of increased volatility in income distribution. Flexible prices (where firms respond to the additional costs of running the capital stock at other than full capacity) are shown to have similar effects to monetary policy. [ABSTRACT FROM AUTHOR]

Ever since the COVID-19 pandemic struck Uganda, much emphasis by the policy makers and researchers were on the health effects of the pandemic at the expense of the economic effects hence creating a research gap. The cardinal aim of this study was to examine the economic effects of the pandemic on the wellbeing of the market vendors in Kampala city. The specific objectives of this study were; examining how the COVID-19 pandemic economically affected the market vendors in Kampala city, and determining if the pandemic was a demand or supply side shock. The study employed the Blinder-Oaxaca (B-O) decomposition technique, which was originally used in labor economics to decompose earnings gaps and to estimate the level of discrimination. This decomposition method analyses changes in a given variable over time. Descriptive statistics such as means, frequencies, and percentages were generated to gain insights into the data. Consumption and Sales were used as proxies for demand whereas the proxy for supply was production. The decomposition results from the Oaxaca estimates show that consumption, sales, and production reduced after the introduction of the COVID-19 restriction. The pandemic affected the market vendors economically through reduced consumption, sales, and disruption of the supply chain. It is recommended that the government provide appropriate support in form of income support, access to low credit and building the digital capacity of market vendors. This study contributes to the understanding of the economic effects of the pandemic on vulnerable groups-the market vendors.

Research Summary: We examine how and why pre‐existing vertical scope may cause differences in product market exit rates after sudden and exogenous decreases in demand. Our empirical context is the U.S. medical diagnostic imaging industry (2004–2009), wherein a major Medicare reform created a derived demand shock to equipment manufacturers. Using a difference‐in‐difference‐in‐difference design, we find integrated firms were more likely to exit than nonintegrated firms. Building on the literature conceptualizing firms' pre‐shock vertical scope as a representation of existing resources and governance choices, we explain that integrated and nonintegrated firms responded differently by leveraging their own distinctive capabilities. Our qualitative insights suggest that higher market exit of integrated firms was driven by their higher adjustment costs due to frictions across strategies for demand management versus cost reduction. Managerial Summary: This study investigates whether having a dedicated sales force or utilizing third‐party distributors can help mitigate the adverse effect of an abrupt demand decrease on manufacturers. In the context of the US medical imaging equipment industry affected by the 2005 Deficit Reduction Act, we show that all firms implemented strategies for demand management, cost reduction, and product portfolio reconfiguration in response. Manufacturers using external distributors experienced fewer frictions across these strategies than those with an internal sales force and were less likely to exit. Thus, a firms' vertical scope can impact how they cope with environmental changes. [ABSTRACT FROM AUTHOR]

We study the market response to firm‐specific demand shocks in a natural experiment setting. In 2006, a boycott of Danish products in several Arab countries was devastating for Danish cheese products firms. In Saudi Arabia, their market share collapsed from 16.5 percent in January to below 1 percent in March, and never fully recovered; by 2009, it was 6.3 percent. By analyzing micro‐level (scanner) price and sales data, we find the following. (i) Danish firms lowered prices but kept the product mix the same. (ii) Non‐Danish firms kept prices constant but changed their product mix by introducing new products and new product bundles. (iii) Non‐Danish firms chose to introduce products that were similar to the Danish products in characteristic space in order to compete head‐to‐head. We complement the analysis with a theoretical framework that helps to account for our main findings. [ABSTRACT FROM AUTHOR]

This study explores the co‐movement among oil and the stock, bond, and housing markets of the U.S. and major developed countries across Europe and Asia. The results indicate that oil is long‐run integrated with each asset class, and that the extent of convergence has increased after the onset of the 2007–2009 global financial crisis (GFC). Moreover, oil contributes most heavily toward the common trends, implying that oil is the "leader" sector that drives each asset class toward long‐run equilibrium relationships. Short‐run analyses indicate that oil shocks induce a negative response in stock and housing returns and a positive reaction in bond returns, showing a tendency to become more intense and persistent after the GFC. When oil shocks are disentangled, the results indicate that supply and demand have heterogeneous effects on the three global asset classes. Over the long‐run, demand shocks make the most significant contribution to the common trends and "lead" the other asset classes, whereas supply shocks have either a negligible or a weaker impact. Over the short‐run, demand shocks positively impact the stock and housing markets and negatively impact bonds, while supply shocks induce negative and weaker impacts on all three asset classes. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to verify the impact of the supply shock (fall in harvested output) and demand shock (fall in household income) due to the pandemic on the consumption of necessities and household savings of tilapia's smallholder farmer. Design/methodology/approach: The researchers randomly chose 144 households as research samples using the proportional random sampling technique in Padang Jaya District, North Bengkulu Regency. Researchers collected data on household income, farm losses, household consumption for basic needs, labor demand, use of production inputs, the amount of output sold and saving both during and before the pandemic. The data were collected from the sample using a questionnaire prepared by the researchers. This study used a simultaneous equations system for arranging tilapia's smallholder farmer household economic model. Findings: This study verified that the demand shock phenomenon makes households more severe than the supply shock phenomenon. The demand shock phenomenon made worse-off tilapia smallholder farmers because it caused their household savings to drop during the pandemic. The fall in savings will disrupt the stability of consumption of household necessities (health, food, education and clothing) in the future. Originality/value: The main contribution of this study was providing empirical evidence about the impact of the demand and supply shock of COVID-19 on the most vulnerable entities in the Indonesian freshwater aquaculture industry, namely, smallholder farmer households of freshwater aquaculture fish. Peer review: The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-08-2022-0554. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to determine how COVID-19 shocks and government policies affected MSMEs' financial and non-financial performance during the economic turmoil. The paper used both quantitative and qualitative methods. An online questionnaire survey was used to collect quantitative data from 380 Saudi MSMEs. The direct effects of the exogenous variables on the endogenous variable were determined using partial least squares structural equation modeling (PLS-SEM). Furthermore, multigroup analysis was used to examine the moderating effect of policy response on other variables. Interviews were conducted from a qualitative standpoint, and the information was converted into texts and qualitatively analyzed. Demand Shocks, Management/Operational Shocks, and Supply Shocks all have a significant impact on financial performance. The only significant predictor of non-financial performance was demand side shocks. Management/operational side shocks, on the other hand, have no effect on the non-financial performance of MSMEs. Furthermore, policy response was found to be a powerful predictor of both financial and non-financial performance. During the COVID-19 outbreak, MSMEs' policies and assistance programs had no discernible impact on demand and supply side shocks, as well as financial and non-financial performance. Overall, the findings of this study will help the Saudi government and other policymakers determine the best way to deal with current and future COVID-19 pandemics. [ABSTRACT FROM AUTHOR]

The research aims to examine the vulnerability and resilience of road transport enterprises in Poland to a crisis caused by the COVID-19 pandemic. In theory, we refer to the Schumpeterian perspective of creative destruction. In the empirical analysis, survey data on 500 transport companies randomly selected from the database were used. We estimated partial proportional odds models to show the factors responsible for the enterprises' vulnerability and resilience to unforeseen shock. The perspective refers to the total sample size and the division into two subgroups: micro and small and medium enterprises. To justify the results, we calculated a set of statistical indicators and tests. These models enable separating enterprises according to the vulnerability level. Transport enterprises occurred significantly vulnerable to the COVID-19 crisis, particularly the demand shock. The only factor that influenced resilience was the decrease in fuel prices, which allowed a cost reduction. The crisis showed that government aid was helpful in the short run, particularly for micro and small enterprises. The medium-sized enterprises were more resilient than micro and small ones. We formulated several recommendations to help transport enterprises to adjust in the medium term. [ABSTRACT FROM AUTHOR]

Empirical studies on small business survival and exits focus on endogenous firms and top manager characteristics, whereas few studies consider exogenous demand shocks and local consumer awareness and behavior, which are especially important for local hospitality industries. Therefore, this study addresses this research gap by targeting the COVID-19 pandemic and anti-contagion policies as a local demand shock for service industries. We empirically investigate the causal effects of changing local consumer awareness and behavior under COVID-19 on business exits at the prefecture-industry level. Based on a panel fixed-effect estimation using a longitudinal dataset of 32 service industries in 47 prefectures over 10 months in Japan, we demonstrate that an increase in consumers' risk aversion and sympathy for self-restraint from going out, and a decrease in going out with family members, significantly increase the exit ratio in specific service industries in the same prefecture. Moreover, we find that these effects vary by consumer type depending on factors such as gender, age, income level, and household structure. [ABSTRACT FROM AUTHOR]

Demand shocks—unobservable, sudden changes in customer behavior—are a common source of forecast error in airline revenue management systems. The COVID-19 pandemic has been one example of a highly impactful macro-level shock that significantly affected demand patterns and required manual intervention from airline analysts. Smaller, micro-level shocks also frequently occur due to special events or changes in competition. Despite their importance, shock detection methods employed by airlines today are often quite rudimentary in practice. In this paper, we develop a science-based shock detection framework based on statistical hypothesis testing which enables fast detection of demand shocks. Under simplifying assumptions, we show how the properties of the shock detector can be expressed in analytical closed form and demonstrate that this expression is remarkably accurate even in more complex environments. Simulations are used to show how the shock detector can successfully be used to identify positive and negative shocks in both demand volume and willingness-to-pay. Finally, we discuss how the shock detector could be integrated into an airline revenue management system to allow for practical use by airline analysts. [ABSTRACT FROM AUTHOR]

MSMEs are the core of economic growth and development in every country. They constitute a dominant player in the industrial landscape of most countries including India. The current study uses secondary data to assess the depth of impact of the two biggest crises of the 21st century – the Global Financial Crisis (2008-09) and the Covid-19 pandemic (2020-21). Secondary data reveals that Covid-19 has had a far stronger and deeper impact on Indian MSMEs relative to the GFC mainly due to the synchronicity of impact across the globe and across sectors due to the Covid-19 onslaught. While GFC was an exogenous shock to India limited to the financial sector, the Covid-19 had an exogenous trigger which imploded within. The twin demand and supply shock nature of the Covid-19 crisis exacerbated the woes of the real sector. The prevailing economic landscape at the time of Covid-19 was grim which reduced the shock absorption capability of the world economy in general and Indian economy in particular. Reskilling MSMEs, periodic business monitoring using scenario analysis and conduct of stress tests are submissions made in this study to overcome the sitting duck syndrome in future. The study can be extended further to assess the longitudinal impact of the Covid-19 on Indian MSMEs. [ABSTRACT FROM AUTHOR]

The emergence of pandemics is generally seen as a shock to the economic system because its mode of entry into economic interactions and relationships is exogenous. Therefore it is essential to classify the channels of this phenomenon, and this section offers a brief description of those channels. Naturally, with mobility restrictions, the closure of many educational and non-educational institutions, the reduction of business hours, the supply of goods and services are reduced. Besides, the economy's final demand, including household, government, nonprofit organizations, demand for investment, and demand for corporate warehouses, is mostly that. The third axis of economic power is a marked reduction in imports due to limitations on its foreign operations. Exports will be affected by the disease, as will imports. The demand-driven Leontief model is often used to integrate shocks from imports and exports. The internal symmetric Input-Output table is used instead of the traditional Input-Output table, to integrate export and import into the design. The generalized partial hypothetical extraction model is often used to calculate supply and demand shocks by changing the final demand vector.

Empirical studies on small business survival and exits focus on endogenous firms and top manager characteristics, whereas few studies consider exogenous demand shocks and local consumer awareness and behavior, which are especially important for local hospitality industries. Therefore, this study addresses this research gap by targeting the COVID-19 pandemic and anti-contagion policies as a local demand shock for service industries. We empirically investigate the causal effects of changing local consumer awareness and behavior under COVID-19 on business exits at the prefecture-industry level. Based on a panel fixed-effect estimation using a longitudinal dataset of 32 service industries in 47 prefectures over 10 months in Japan, we demonstrate that an increase in consumers’ risk aversion and sympathy for self-restraint from going out, and a decrease in going out with family members, significantly increase the exit ratio in specific service industries in the same prefecture. Moreover, we find that these effects vary by consumer type depending on factors such as gender, age, income level, and household structure.

The COVID-19 pandemic, which began as an international health crisis, has quickly become an economic crisis on both national and global scale. As economies are linked through global value chains, this crisis has significantly affected the global economy. The strict measures to prevent the rapid spread of the virus negatively affected the supply and demand relations. In this study, the authors examine the inter-provincial supply–demand relations in Turkey via a complex network analysis. The analysis has the following two stages: examination of topological properties and simulation estimates. The topological analysis reveals the complexity and core–periphery structure of the inter-provincial trade network. Istanbul comes to the forefront as the strongest node in the network in terms of both supply and demand. Simulation results reveal that such economic dependence on Istanbul alone makes the inter-provincial trade system more vulnerable against supply or demand shock.

The COVID-19 pandemic, which began as an international health crisis, has quickly become an economic crisis on both national and global scale. As economies are linked through global value chains, this crisis has significantly affected the global economy. The strict measures to prevent the rapid spread of the virus negatively affected the supply and demand relations. In this study, the authors examine the inter-provincial supply–demand relations in Turkey via a complex network analysis. The analysis has the following two stages: examination of topological properties and simulation estimates. The topological analysis reveals the complexity and core–periphery structure of the inter-provincial trade network. Istanbul comes to the forefront as the strongest node in the network in terms of both supply and demand. Simulation results reveal that such economic dependence on Istanbul alone makes the inter-provincial trade system more vulnerable against supply or demand shock. [ABSTRACT FROM AUTHOR]

This paper decomposes daily crude oil shocks into demand shock, supply shock and risk shock. Then, it employs Diebold and Yilmaz connectedness index approach to explore the differences for the time-varying effect of different types of structural shocks on new energy stock markets in China, Europe and the United States during the period 10 June 2009–30 October 2018. The new findings show that: 1) There are time-varying features of structural shocks to all new energy markets. 2) The crude oil demand shock and risk shock have a large explanatory ability on the returns of all new energy stock markets, while the crude oil supply shock has a small impact. 3) The influences of crude oil demand shocks on the market returns of new energy in China, Europe and the United States are 1.31%, 8.64%, and 4.47%, respectively; however, the affection of crude oil risk shocks to the market returns of new energy in the same markets are 3.17%, 7.91%, and 21.51%, respectively. 4) The crude oil demand shock and supply shock have little impact on any new energy market volatilities, but the effects of crude oil risk shocks to China and the United States’ new energy market volatilities are 2.44% and 3.14%, respectively.

Dynamics of rent, vacancy, supply and demand on the office market of emerging commercial real estate markets have long been under-researched. The paper fills the gap in economic literature by investigating the growing office market in Warsaw. In particular, we evaluate whether the influence of demand and supply shocks differ depending on the current market conditions. Using Error Correction Model approach, we investigated the rent adjustments on the office market in Warsaw, which is the major property market in Central and Eastern Europe. We replaced variables of the basic model with asymmetric variables to check for asymmetric adjustments in the office market. The study period covers data from 2005:1Q to 2016:1Q. The empirical results suggest that demand shock had a stronger impact on rent when the market vacancy rate was below the average for the period considered. Additionally, the demand shock had a stronger impact on rent when the rent was above the equilibrium level.

Dynamics of rent, vacancy, supply and demand on the office market of emerging commercial real estate markets have long been under-researched. The paper fills the gap in economic literature by investigating the growing office market in Warsaw. In particular, we evaluate whether the influence of demand and supply shocks differ depending on the current market conditions. Using Error Correction Model approach, we investigated the rent adjustments on the office market in Warsaw, which is the major property market in Central and Eastern Europe. We replaced variables of the basic model with asymmetric variables to check for asymmetric adjustments in the office market. The study period covers data from 2005:1Q to 2016:1Q. The empirical results suggest that demand shock had a stronger impact on rent when the market vacancy rate was below the average for the period considered. Additionally, the demand shock had a stronger impact on rent when the rent was above the equilibrium level. [ABSTRACT FROM AUTHOR]

Research summary: We examine how interactions among a firm's capabilities influence the extent and direction of firm adaptation under conditions of demand‐side change. Our empirical context is the U.S. defense industry, within which we study firms receiving defense‐related Small Business Innovation Research (SBIR) awards around September 11, 2001, an event which constituted an exogenous demand‐side shock in which technology‐related preferences of customers were reshuffled. We find that under demand‐side change, preexisting customer relationships have a double‐edged effect: They facilitate "extension‐based" adaptation when interacted with technology capabilities experiencing a decline in customer preferences, and they hinder "novelty‐based" adaptation when interacted with technology capabilities experiencing an increase in such preferences. We also find that both types of technological capabilities together facilitate adaptation along the extension and novelty paths. Managerial summary: Demand‐side change, in which customer preferences for particular technologies are reshuffled, occurs in many industry settings. A deeper understanding of the factors shaping firm adaptation under this form of change can influence managers' decisions to implement strategies to plan for and react to such change. Using a sample of firms receiving defense‐related SBIR awards around September 11, 2001, we show that the customer relationships a firm develops prior to demand‐side change can have a double‐edged effect on firm adaptation. Such relationships facilitate "extension‐based" adaptation when combined with technology capabilities declining in customer preferences and hinder "novelty‐based" adaptation when combined with technology capabilities increasing in customer preferences. In addition, the combination of the two technological capability types facilitates adaptation along both paths. [ABSTRACT FROM AUTHOR]

In this paper, I explore the potential effects of the COVID‐19 pandemic on Canadian food processors. First, COVID‐19 may have an impact on food processing economic activities because of supply and demand shocks. Second, the impact of COVID‐19 on food processing may depend on the type of products and the size of the processors. The effects of measures taken by the government to flatten the epidemiological curve on the economic activities of the food processing sector are uncertain. [ABSTRACT FROM AUTHOR]

The local effects of mining might simply come and go with mine production. In this paper we revisit Aragón and Rud's (2013) study of the Yanacocha mine, frequently cited to account for local economic effects and backward linkages, but we offer a more nuanced interpretation: first, effects fade with the mine exhaustion; and second, impacts are the result of consumption boom-and-bust dynamics. While we find it more conceptually accurate to reserve the concept of backward linkages for effects of a productive nature, our evidence reveals that unskilled services is the one sector that benefits, in contrast to manufactures and skilled services. We stress that impact evaluations of mines are contingent to time and place, and contend that exploring the extent to which multipliers generate spillovers is central. The short-run effects of a mine might in fact give little indication of how to tell or make a blessing from a curse. [ABSTRACT FROM AUTHOR]