Tracking the Economic Impact of COVID-19 and Mitigation Policies in Europe and the United States

By Sophia Chen, Deniz O Igan, Nicola Pierri, Andrea F Presbitero

July 10, 2020

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Sophia Chen, Deniz O Igan, Nicola Pierri, and Andrea F Presbitero. Tracking the Economic Impact of COVID-19 and Mitigation Policies in Europe and the United States, (USA: International Monetary Fund, 2020) accessed September 19, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We use high-frequency indicators to analyze the economic impact of COVID-19 in Europe and the United States during the early phase of the pandemic. We document that European countries and U.S. states that experienced larger outbreaks also suffered larger economic losses. We also find that the heterogeneous impact of COVID-19 is mostly captured by observed changes in people’s mobility, while, so far, there is no robust evidence supporting additional impact from the adoption of non-pharmaceutical interventions. The deterioration of economic conditions preceded the introduction of these policies and a gradual recovery also started before formal reopening, highlighting the importance of voluntary social distancing, communication, and trust-building measures.

Subject: Commodities, COVID-19, Electricity, Expenditure, Health, Labor, Labor markets, Unemployment, Unemployment benefits

Keywords: Anticipation effect, COVID-19, Economic activity, Economic recovery, Electricity, Energy consumption, Europe, Google community mobility, Hit country, Labor market, Labor markets, Mitigation policies, Mitigation policy, Non-Pharmaceutical Interventions, NPI adopter, NPI timing, NPIs introduction, Pandemic, Policy response, State level, Unemployment, Unemployment benefits, Weakening economy, WP

Publication Details

Pages:

25
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2020/125
Stock No:

WPIEA2020125
ISBN:

9781513549644
ISSN:

1018-5941

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