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We apply the SIR-macro model proposed by Eichenbaum et al. (2020) in its complete version to comparatively study the interaction between economic decisions and COVID-19 epidemics in five different Brazilian states: São Paulo (SP), Amazonas (AM), Ceará (CE), Rio de Janeiro (RJ) and Pernambuco (PE). Our objective is to analyze qualitatively how the main intrinsic differences of each of these states can affect the epidemic dynamics and its consequences. For this purpose, we compute and compare the model for each of the states, both in competitive equilibrium and under optimal containment policy adoption, and analyze the implications of optimal policy adoption. We conclude that the intrinsic characteristics of the five different states imply relevant differences in the general dynamics of the epidemic, in the optimal containment policies, in the effect of the adoption of these policies...

We use microsimulation to estimate the distributional consequences of covid-19-induced lockdown policies in Argentina, Brazil, Colombia and Mexico. Our estimates of the poverty consequences are worse than many others’ projections because we do not assume that the income losses are proportionally equal across the income distribution. We also simulate the effects of most of the expanded social assistance governments have introduced in response to the crisis. This has a large offsetting effect in Brazil and Argentina, much less in Colombia. In Mexico, there has been no such expansion. Contrary to prior expectations, we find that the worst effects are not on the poorest, but those (roughly) in the middle of the ex ante income distribution. In Brazil we find that poverty among the afrodescendants and indigenous populations increases by more than for whites, but the offsetting effects of...

We forecast the short-term evolution of the Mexican economy after the COVID-19 shock. We take into account the fact that there is no similar shock observed in contemporaneous data. We combine an econometric procedure with a basic SIR model of the pandemic. To make the forecasts we first calculate an estimate of the shocks that hit the economy starting in March 2020. We then produce several forecasts in which we make variations on two dimensions: introducing a path for the pandemic or not, and if we do, we consider three scenarios. The introduction of paths of the pandemic in which new cases fall has a positive effect on the economy. The main results are the following. First, the shocks that hit the economy starting in March 2020 have the potential to produce a slow recovery of economic activity. In a forecast not conditioned on any path for the pandemic, the annual growth rate of the...

The outbreak of COVID-19 led to a spike in the unemployment rate and a decrease in the number of job openings. It is unknown whether this shock in the labor market affects different groups of job seekers equally. With the help of a correspondence study I describe the relationship between labor market conditions and ethnic labor inequality. The results provide evidence of the changes in the ethnic employment gap during the early stage of the COVID-19 outbreak. Moreover, these changes are accompanied by fluctuations in the labor market competition.

On March 24, 2020, India’s Prime Minister announced the world’s largest COVID-19 lockdown, bringing to a near-halt the economic and social lives of more than one billion Indian residents. This paper quantifies the economic impacts and behavioral changes induced by this unprecedented policy using two unique data sources: Facebook mobility data and a representative sample of previously surveyed low income Delhi households. Compliance with the lockdown was widespread: intra-city movement declined by 80% following the announcement. The economic consequences have been accordingly severe, with income and days worked falling by 86 and 72% respectively. Nevertheless, observance of public health directives was high: mask usage rose by 73 percentage points and handwashing became nearly universal, while time spent outdoors and smoking both declined. We also show how government-provided social...

The COVID-19 pandemic and the consequent Government-imposed restrictions have altered the way of life around the globe. Using the newly “Nigeria Baseline COVID-19 National Longitudinal Phone Survey 2020”, this paper contributes to the nascent literature on the Economics of COVID-19 by examining the impact of changes in income and social assistance due to the pandemic on the coping strategies of family business owners. We find that family business owners who experienced a reduction in income and those that received social assistance due to the pandemic are likely to increase their coping level. We discuss the policy implications of these findings.

This research assesses how low-income households in rural Kenya coped with the immediate economic consequences of the COVID-19 pandemic. It uses granular financial data from weekly household interviews covering six weeks before the first case was detected in Kenya to five weeks after during which various containment measures were implemented. Based on household-level fixed-effects regressions, our results suggest that income from work decreased with almost one-third and income from gifts and remittances reduced by more than one-third after the start of the pandemic. Nevertheless, household expenditures on food remained at pre-COVID levels. We do not find evidence that households coped with reduced income through increased borrowing, selling assets or withdrawing savings. Instead, they gave out less gifts and remittances themselves, lent less money to others and postponed loan...

Purpose: The purpose of this study is to assess the potential economic cost of the COVID-19 pandemic on China’s macroeconomy and agri-food system and provide policy recommendations to stimulate economic growth and agri-food system development. Design/methodology/approach: An economy-wide multisector multiplier model built on China’s most recent social accounting matrix (SAM) for 2017 with 149 economic sectors is used to assess the impact of COVID-19 on China’s macroeconomy and agri-food system. SAM multiplier analysis focuses on supply chain linkages and captures the complexity of an interconnected economy. Findings: The paper finds that both the macroeconomy and agri-food systems are hit significantly by COVID-19. There are three main findings. First, affected by COVID-19, GDP decreased by 6.8% in the first quarter of 2020 compared with that in 2019, while the economic loss of the...

We quantify the macroeconomic effects of COVID-19 for emerging markets using a SIR-multi-sector-small open economy model and calibrating it to Turkey. Domestic infection rates feed into both sectoral supply and sectoral demand shocks. Sectoral demand shocks also incorporate lower external demand due to foreign infection rates. Infection rates change endogenously with different lockdown policies. To calibrate the model, we use indicators of physical proximity and tele-workability of jobs to measure supply shocks. We use real-time credit card purchases to pin down demand shocks. Our results show that the optimal policy, which yields the lowest economic cost and saves the maximum number of lives, can be achieved under a full lockdown of 39 days. Partial and/or no lockdowns have higher economic costs as it takes longer to control the disease and hence to normalize the demand. Economic...

The COVID-19 crisis has the potential to turn into the biggest emerging market (EM) crisis since 1980s. We quantify the macroeconomic effects of COVID-19 for a small open economy by calibrating a SIR-multi-sector-macro model to Turkey. We measure sectoral supply shocks utilizing teleworking and physical job proximity, and sectoral demand shocks with credit card purchases. Both shocks are also affected from changing infection rates under different lockdown scenarios. Our results show that the optimal policy, which yields the lowest economic cost and saves the maximum number of lives, can be achieved under a full lockdown. Being an open economy amplifies the economic costs through two main channels. First, the demand shock has domestic and external components. Second, the initial shock is magnified due to domestic and international input-output linkages. The policy options are limited...