We analyse the impact of the COVID-19 crisis on EU households' income and assess the cushioning effect of discretionary policy measures taken by the EU Member States. Our assessment is based on the European Commission Spring 2020 forecasts and counterfactual scenarios under a no policy change...

We analyse the UK policy response to Covid-19 and its impact on household incomes, as of late April 2020, using microsimulation methods. We estimate that households will lose a substantial share of their net income (8% on average). The proportional losses are largest for higher-income families....

Using micro-level data, we document a systematic, income-related component in household income forecast errors. We show that these errors can be formalized by a modest deviation from rational expectations, where agents overestimate the persistence of their income process. We then investigate the...