{
  "title": "Initial Output Losses from the Covid-19 Pandemic: Robust Determinants",
  "publication": "IMF Working Papers, January 29, 2021",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2021/01/29/initial-output-losses-from-the-covid-19-pandemic-robust-determinants-50025",
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  "summary": "While the COVID-19 pandemic is affecting all countries, output losses vary considerably across countries. We provide a first analysis of robust determinants of observed initial output losses using model-averaging techniques—Weighted Average Least Squares and Bayesian Model Averaging.",
  "sections": [
    {
      "heading": "Summary and primary findings",
      "content": "- Objective: Provide a first analysis of robust determinants of observed initial output losses using model-averaging techniques—Weighted Average Least Squares (WALS) and Bayesian Model Averaging (BMA).\n- Core finding: Countries that experienced larger initial output losses during the COVID-19 pandemic tend to have the following characteristics:\n  - lower GDP per capita\n  - more stringent containment measures\n  - higher deaths per capita\n  - higher tourism dependence\n  - more liberalized financial markets\n  - higher pre-crisis growth\n  - lower fiscal stimulus\n  - higher ethnic and religious fractionalization\n  - more democratic regimes\n- Interpretation regarding GDP per capita: Lower resilience of poorer countries reflects the higher economic costs of containment measures and deaths in such countries and less effective fiscal and monetary policy stimulus."
    },
    {
      "heading": "Methodology",
      "content": "- Techniques used:\n  - Weighted Average Least Squares (WALS)\n  - Bayesian Model Averaging (BMA)\n- Scope: Analysis of determinants of observed initial output losses across countries during the COVID-19 pandemic."
    },
    {
      "heading": "Policy-relevant implications and considerations",
      "content": "- Fiscal and monetary policy effectiveness: Lower fiscal stimulus is associated with larger initial output losses, implying policy response strength matters for resilience.\n- Vulnerabilities: Higher tourism dependence and more liberalized financial markets are associated with larger losses, indicating exposure channels to pandemic shocks.\n- Socio-political factors: Higher ethnic and religious fractionalization and more democratic regimes are linked to larger initial output losses, suggesting institutional and social dimensions affect outcomes.\n- Health and containment trade-offs: More stringent containment measures and higher deaths per capita are associated with larger output losses, highlighting trade-offs between public-health measures and short-term economic performance.\n- Distributional implication: Poorer countries (lower GDP per capita) are less resilient due to both higher costs of containment/deaths and less effective policy responses.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2021/01/29/initial-output-losses-from-the-covid-19-pandemic-robust-determinants-50025"
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    "Authors: Davide Furceri, Jonathan David Ostry",
    "Published: January 29, 2021",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513567013.001",
    "Objective: Provide a first analysis of robust determinants of observed initial output losses using model-averaging techniques—Weighted Average Least Squares (WALS) and Bayesian Model Averaging (BMA).",
    "Core finding: Countries that experienced larger initial output losses during the COVID-19 pandemic tend to have the following characteristics:",
    "Interpretation regarding GDP per capita: Lower resilience of poorer countries reflects the higher economic costs of containment measures and deaths in such countries and less effective fiscal and monetary policy stimulus.",
    "Techniques used:",
    "Scope: Analysis of determinants of observed initial output losses across countries during the COVID-19 pandemic.",
    "Fiscal and monetary policy effectiveness: Lower fiscal stimulus is associated with larger initial output losses, implying policy response strength matters for resilience.",
    "Vulnerabilities: Higher tourism dependence and more liberalized financial markets are associated with larger losses, indicating exposure channels to pandemic shocks.",
    "Socio-political factors: Higher ethnic and religious fractionalization and more democratic regimes are linked to larger initial output losses, suggesting institutional and social dimensions affect outcomes.",
    "Health and containment trade-offs: More stringent containment measures and higher deaths per capita are associated with larger output losses, highlighting trade-offs between public-health measures and short-term economic performance.",
    "Distributional implication: Poorer countries (lower GDP per capita) are less resilient due to both higher costs of containment/deaths and less effective policy responses.",
    "**Working Paper**"
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