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City planning --- Cities and towns --- Civic planning --- Land use, Urban --- Model cities --- Redevelopment, Urban --- Slum clearance --- Town planning --- Urban design --- Urban development --- Urban planning --- Land use --- Planning --- Art, Municipal --- Civic improvement --- Regional planning --- Urban policy --- Urban renewal --- Government policy --- Management --- Leipziger Messe. --- Leĭpt︠s︡igskai︠a︡ i︠a︡rmarka --- Leipzig Messe --- Leipzig. --- Leipzig Trade Fair --- Leipzig (Germany) --- Leipsic (Germany) --- Laĭptsig (Germany) --- Leipsia (Germany) --- Lipsia (Germany) --- Laixich (Germany) --- Lipsk (Germany) --- Buildings, structures, etc. --- Economic conditions. --- Environmental planning --- Leipzig

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We use data from the aggregate stock market and dividend futures to quantify how investors' expectations about economic growth evolve across horizons in response to the coronavirus outbreak and subsequent policy responses until June 2020. Dividend futures, which are claims to dividends on the aggregate stock market in a particular year, can be used to directly compute a lower bound on growth expectations across maturities or to estimate expected growth using a forecasting model. We show how the actual forecast and the bound evolve over time. As of June 8, our forecast of annual growth in dividends is down 9% in the US and 14% in the EU compared to January 1, and our forecast of GDP growth is down by 2.0% in the US and 3.1% in the EU. The lower bound on the change in expected dividends is -18% in the US and -25% in the EU at the 2-year horizon. News about fiscal stimulus around March 24 boosts the stock market and long-term growth but did little to increase short-term growth expectations. Expected dividend growth has improved since April 1 in both the US and the EU. We conclude by developing and estimating a simple model of the crisis to understand the joint dynamics of short-term dividend futures, stock markets, and bond markets.

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We show that firms' nominal required returns to capital (i.e., their discount rates) are sticky with respect to expected inflation. Such nominally sticky discount rates imply that increases in expected inflation directly lower firms' real discount rates and thereby raise real investment. We analyze the macroeconomic implications of sticky discount rates using a New Keynesian model. The model naturally generates investment-consumption comovement in response to household demand shocks and higher investment in response to government spending. Sticky discount rates imply that inflation has real effects, even absent other nominal rigidities, making them a distinct source of monetary non-neutrality. At the same time, sticky discount rates make the short-term interest rate less effective at stimulating investment. Optimal monetary policy focuses on inflation expectations and permanently lowers the long-run inflation target in response to expansionary shocks, even when shocks are temporary.