The NBER Working Paper Series presents a study on the economic impact of the COVID-19 pandemic, focusing on the surge in economic uncertainty. The authors identify three key indicators: stock market volatility, newspaper-based economic uncertainty, and subjective uncertainty in business expectation surveys. These indicators provide real-time measures of uncertainty. The study documents a significant increase in economic uncertainty in the past several weeks, with the VIX rising by 500% from January 15, 2020, to March 31, 2020. The Economic Policy Uncertainty Index (EPU) also surged, reaching nearly 400 in March 2020. Business expectation surveys show a sharp increase in uncertainty in March 2020, with over 90% of articles mentioning "COVID," "Coronavirus," or "pandemic." The study uses these indicators to assess the macroeconomic impact of the pandemic. By feeding these shocks into an estimated model of disaster effects, the authors find that the U.S. real GDP is projected to contract by nearly 11% in 2020 Q4, with a 90% confidence interval extending to nearly 20%. About half of this contraction is attributed to COVID-induced uncertainty. The study highlights the challenges of measuring uncertainty in real time, especially during rapid changes like the pandemic. It also notes that the actual effects may be larger due to factors like the prolonged impact of the pandemic on business expenditures and productivity. The study concludes that the pandemic has created an enormous uncertainty shock, larger than the 2008 financial crisis and more similar to the Great Depression. The authors emphasize the importance of real-time measures to understand and respond to the economic impact of the pandemic.The NBER Working Paper Series presents a study on the economic impact of the COVID-19 pandemic, focusing on the surge in economic uncertainty. The authors identify three key indicators: stock market volatility, newspaper-based economic uncertainty, and subjective uncertainty in business expectation surveys. These indicators provide real-time measures of uncertainty. The study documents a significant increase in economic uncertainty in the past several weeks, with the VIX rising by 500% from January 15, 2020, to March 31, 2020. The Economic Policy Uncertainty Index (EPU) also surged, reaching nearly 400 in March 2020. Business expectation surveys show a sharp increase in uncertainty in March 2020, with over 90% of articles mentioning "COVID," "Coronavirus," or "pandemic." The study uses these indicators to assess the macroeconomic impact of the pandemic. By feeding these shocks into an estimated model of disaster effects, the authors find that the U.S. real GDP is projected to contract by nearly 11% in 2020 Q4, with a 90% confidence interval extending to nearly 20%. About half of this contraction is attributed to COVID-induced uncertainty. The study highlights the challenges of measuring uncertainty in real time, especially during rapid changes like the pandemic. It also notes that the actual effects may be larger due to factors like the prolonged impact of the pandemic on business expenditures and productivity. The study concludes that the pandemic has created an enormous uncertainty shock, larger than the 2008 financial crisis and more similar to the Great Depression. The authors emphasize the importance of real-time measures to understand and respond to the economic impact of the pandemic.