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The Economic Effects of COVID-19 Containment Measures
Author:
Mr. Pragyan Deb
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,
Davide Furcerinull

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Mr. Jonathan David Ostry
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Nour Tawk
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Series:
IMF Working Papers
Volume/Issue:
Volume 2020: Issue 158
Language:
English
Publication Date:
07 Aug 2020
DOI:
https://doi.org/10.5089/9781513550251.001
ISBN:
9781513550251
ISSN:
1018-5941
Pages:
44
Keywords:
WP; containment measure; public transport; policy response; types containment; time trend; measures to the spread; stringency index; different containment measure; costly containment measure; containment measures to the spread of the virus; relaxation of containment measure; monetary policy support; measures to the spread of the virus; COVID-19; Industrial production; Fiscal stimulus; Central bank policy rate; Global; pandemics; containment measures; monetary policy stimulus
Legal-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.
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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 stay-at-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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2020: Issue 158