Working Paper: CEPR ID: DP15087
Authors: Pragyan Deb; Davide Furceri; Jonathan D. Ostry; Nour Tawk
Abstract: Containment measures are crucial to halt the spread of the 2019 COVID-19 pandemic but entail large short-term economic costs. This paper tries to quantify these effects using daily global data on real-time containment measures and indicators of economic activity such as Nitrogen Dioxide (NO2) emissions, flights, energy consumption, maritime trade, and mobility indices. Results suggest that containment measures have had, on average, a very large impact on economic activity - equivalent to a loss of about 15 percent in industrial production over a 30-day period following their implementation. Using novel data on fiscal and monetary policy measures used in response to the crisis, we find that these policy measures were effective in mitigating some of these economic costs. We also find that while workplace closures and stayat- home orders are more effective in curbing infections, they are associated with the largest economic costs. Finally, while easing of containment measures has led to a pickup in economic activity, the effect has been lower (in absolute value) than that from the tightening of measures.
Keywords: COVID-19; Pandemics; Containment Measures
JEL Codes: E52; E58; D43; L11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Containment measures (F38) | Economic activity (E29) |
| Containment measures (F38) | NO2 emissions (Q52) |
| Fiscal and monetary policy measures (E63) | Economic costs of containment measures (E64) |
| Certain containment measures (F38) | Infections (I12) |
| Easing containment measures (E63) | Economic activity (E29) |
| Restrictions on international travel (Z38) | COVID-19 infections (I14) |