Niels Joachim Gormsen and Ralph S. J. Koijen
Data on dividend futures, which are claims to the stock market’s dividends in a given year, can be used to estimate the economic impact of the virus at different horizons. As of March 16, expected growth over the next quarter declined by 2.5% in the US and 3.5% in Europe (both annualized) compared to the beginning of the year. We provide a lower bound on changes in expected GDP which bottoms out at the three-year horizon, with expected GDP down by as much as 10% in US and 12% in Europe.
