Russia-Ukraine war: A note on short-run production and labour market effects of the energy crisis

We provide first causal evidence of effects of the energy crisis on Germany, the largest economy in Europe. Combining cost structure data, national accounts and administrative labour market data, we identify effects in a sectoral panel setting using sector-specific energy intensity as a "bite"variable. The results show that through the channel of energy intensity, monthly production and real turnover decreased by 4.1 and 2.6 per cent, respectively, after the onset of the Russia-Ukraine war. Instead of layoffs, firms safeguarded employment by means of short-time work, with a 24.1 per cent increase in notifications. Vacancy posting was reduced by 10.3 per cent.