## The Effects of COVID-19 Vaccines on Economic Activity

_IMF Working Papers, October 19, 2021_

## Source details

**Canonical URL:** [The Effects of COVID-19 Vaccines on Economic Activity](https://www.imf.org/en/publications/wp/issues/2021/10/19/the-effects-of-covid-19-vaccines-on-economic-activity-494714)

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## Bibliographic details
- Authors: Pragyan Deb, Davide Furceri, Daniel Jimenez, Siddharth Kothari, Jonathan David Ostry, Nour Tawk
- Published: October 19, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781589063761.001

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### Overview
- Paper objective: Empirically examine the economic effects of COVID-19 vaccine rollouts using a cross-country daily database of vaccinations and high frequency indicators of economic activity.
- Authors: Pragyan Deb, Davide Furceri, Daniel Jimenez, Siddharth Kothari, Jonathan David Ostry, Nour Tawk.
- Publication date: October 19, 2021.
- Sample coverage: 46 countries over the period December 16, 2020 to June 20, 2021.

### Data and methodology
- High-frequency activity indicators used:
  - Nitrogen dioxide (NO2) emissions.
  - Carbon monoxide (CO) emissions.
  - Google mobility indices.
- Identification strategy:
  - Uses surprises in vaccines administered (vaccine surprises) to identify causal effects of vaccination increases on economic activity.

### Key empirical findings
- An unexpected increase in vaccination per capita is associated with a significant increase in economic activity.
- Evidence for non-linear effects:
  - The marginal economic benefits of vaccination are larger when vaccination rates are higher.
- Role of country-specific conditions:
  - Lower economic gains from vaccination if strict containment measures are in place.
  - Lower economic gains if the country is experiencing a severe outbreak.
- Cross-border effects:
  - Results provide evidence of spillovers across borders, underscoring the importance of equitable access to vaccines across nations.

### Policy implications and recommendations
- Vaccine rollouts can materially boost short-run economic activity through channels captured by NO2, CO, and mobility indicators.
- Maximizing economic gains from vaccination may require:
  - Achieving higher vaccination rates where marginal benefits are larger.
  - Coordinating containment policies with vaccination progress to avoid blunting economic gains.
  - Addressing severe outbreaks alongside vaccination to preserve economic benefits.
- International coordination:
  - Evidence of cross-border spillovers highlights the economic rationale for equitable access to vaccines across countries.

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## Content in this bundle

- **Working Paper**
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  - [Working Paper (PDF)](/-/media/files/publications/wp/2021/english/wpiea2021248-print-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2021/10/19/the-effects-of-covid-19-vaccines-on-economic-activity-494714_