Sentiment and firm behavior during the COVID-19 pandemic.

2 shows that there is no relation between firms’ pre-pandemic business situation in Q4 2019, as measured by the reported business conditions in Panel (c) and whether firms were optimistic or pessimistic about the shutdown duration, and a marginally significant but quantitatively negligible relation between expected shutdown duration and the six months ahead business expectations in Panel (d).

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The third row shows that the expected shutdown duration’s relation to firms’ optimism or pessimism, measured as to whether they consistently over- or underpredict their own business developments in the spirit of Bachmann and Elstner (2015) , is at most borderline significant and economically very weak (Panel (e)), 14 and unrelated to their August 2019 expectations regarding GDP growth for 2020 (Panel (f)).

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