Jay Hyun, Daisoon Kim, Seung-Ryong Shin, 10 October 2020

During periods of turmoil such as the Covid-19 pandemic, firms with more resilient business models tend to survive and expand more than others. This column presents evidence that firms with higher global connectedness and market power are more resilient to domestic pandemic shocks. While global production and export networks expose firms to foreign pandemic shocks, they potentially make firms less susceptible to domestic pandemic shocks through diversification of suppliers and markets. In addition, higher market power could provide buffers by allowing bigger margins of adjustment. 

Alexander Karaivanov, Shih En Lu, Hitoshi Shigeoka, 09 October 2020

The mandatory wearing of face masks remains a contentious policy issue during the COVID-19 pandemic. This column evaluates the impact of mask mandates on the spread of COVID-19 in Canada, using the different timings that masks were mandated across the 34 health districts of the province of Ontario. Mask mandates are associated with a 25% or larger weekly reduction in new COVID-19 cases in July and August, relative to the absence of mandates. Requiring indoor masks nationwide in early July could have reduced new COVID-19 cases in Canada by 25%–40% in mid-August, which translates into between 700 and 1,100 fewer cases per week.

Claudia Foroni, Massimiliano Marcellino, Dalibor Stevanovic, 29 September 2020

Forecasting the recession and recovery from the COVID-19 crisis is of substantial policy interest. The pandemic shock shares both similarities and differences with previous crises, such as the financial crisis of 2007-2009. This column evaluates the ability of different forecasting and nowcasting approaches to predict the COVID-19 economic shock and forecast the potential recovery path. It shows that adjusting for forecasting errors made during the financial crisis of 2007-2009 better aligns the COVID forecasts with observed data. The results suggest a slow recovery to pre-COVID-19 levels, lasting several years.

Paul De Grauwe, Yuemei Ji, 24 September 2020

The coronavirus pandemic caused a catastrophic collapse in the world economy. This column analyses the path of this decline and compares it to two other major global crises: the Great Depression in the 1930s and the Great Recession following the banking crisis of 2007-2008. It argues that COVID-19 led to both negative demand and supply shocks, resulting in a contraction of industrial production at an unprecedented pace. However, a combination of strong government policies and a functioning banking sector have led to a swifter rebound in economic activity following the coronavirus shock in comparison with the previous two crises.

Jose Maria Barrero, Nicholas Bloom, Steven Davis, 23 September 2020

The COVID-19 pandemic triggered a sudden, massive shift around the world to working from home. While there is great concern how this will affect inequality and how the economy will adjust, the shift has also saved billions of hours of commuting time in the US alone. Drawing on original surveys, this column estimates that the shift to working from home lowers commuting time among Americans by more than 60 million hours per workday. Americans devote about a third of the time savings to their primary jobs and about 60% to other work activities, including household chores and childcare. The allocation of time savings differs substantially by education group and between persons with and without children at home.

Demosthenes Ioannou, Maria Sole Pagliari, Livio Stracca, 18 September 2020

The debate over the incomplete and fragile nature of Europe’s Economic and Monetary Union has been revived by the Covid-19 pandemic. This column shows that adverse shocks within EMU can be identified and are transmitted to the rest of the world, with implications for economic activity and trade in advanced and emerging economies. Despite the important steps taken during the pandemic by euro area authorities, the drive to complete EMU with a genuine fiscal and financial union needs to continue for the sake of both the euro area and the rest of the world.

Andreas Fuchs, Lennart Kaplan, Krisztina Kis-Katos, Sebastian S. Schmidt, Felix Turbanisch, Feicheng Wang, 16 September 2020

China assumed an important role during the worldwide outbreak of COVID-19 as the main exporter of critical medical goods such as face masks and disinfectants. However, shipments of medical goods have been turned into propaganda campaigns by Chinese state media, raising the question if access to medical goods is granted upon political goodwill. This column uses official monthly trade data from Chinese Customs to investigate the emerging trade patterns, both for commercial exports and donations of medical goods. It shows that both existing trade linkages and political ties to Chinese provinces can help to attract Chinese medical goods.

Yuxian Chen, Yannis Ioannides, 15 September 2020

With the COVID-19 pandemic raging at the beginning of the summer of 2020, countries that depend heavily on international tourism were confronted with the dilemma of whether or not to let travel restart. This column uses international data to explore the relationship between tourism specialisation and short-run economic growth. The results suggest that a 1% increase in tourism specialisation is associated with 0.01 percentage point increase in the growth rate of GDP per capita for OECD countries. This is in line with previous findings but is based on up-to-date panel data.

Steffen Juranek, Jörg Paetzold, Hannes Winner, Floris Zoutman, 12 September 2020

Sweden attracted international attention for not imposing a strict lockdown after the outbreak of COVID-19. This column analyses the labour market effects of this strategy by comparing unemployment and furlough spells in Sweden to three of its Nordic neighbours. The evidence suggests that the labour markets of all countries were severely hit by the pandemic, but Sweden performed slightly better than its neighbours. 

Nicholas W. Papageorge, Matthew Zahn, Michèle Belot, Eline van den Broek-Altenburg, Syngjoo Choi, Julian C. Jamison, Egon Tripodi, 05 September 2020

Individual behaviours affect the spread of infectious disease. This column examines factors that predict individual behaviour during the COVID-19 pandemic in the US using novel survey data. People with lower income and less flexible work arrangements are less likely to engage in behaviours that limit the spread of disease. The burden of measures to stem the pandemic is unevenly distributed across socio-demographic groups in ways that affect behaviour and potentially the spread of illness. Policies that assume otherwise are unlikely to be effective or sustainable.

Michele Valsecchi, Ruben Durante, 02 September 2020

Many internal migrants returned to their place of origin after the initial outbreaks of COVID-19 and before national lockdowns were in place. Has this behaviour contributed to the further spread of the pandemic and to its heavy death toll? Looking at the case of Italy and using data on the place of origin and destination of internal migrants, this column finds that provinces more exposed to return migration from areas hit by the pandemic earlier on experienced considerably more COVID-19 deaths in the ensuing months.

Sam Cosaert, Alexandros Theloudis, Bertrand Verheyden, 28 August 2020

COVID-19 lockdowns and school closures have affected working hours and household income, with an unequal effect on women and men. The collective model of the household has hitherto ignored distinctions between private versus joint activities by parents in household time allocation. This column examines the evolving costs and benefits of togetherness, using Dutch data for 2009–2012, and speculates on how lockdown policies may affect togetherness and household welfare. Joint leisure and childcare generate a loss of flexibility in the labour market, and joint childcare prevents specialisation, generating tension between parental childcare quality and quantity.

Roel Beetsma, Brian Burgoon, Francesco Nicoli, Anniek de Ruijter, Frank Vandenbroucke, 21 August 2020

Building a large and durable consensus for mutual assistance policies in the EU is challenging. Even in times of crisis, member states express different preferences, and policies must reckon with democratic politics. This column presents evidence from a randomised survey to assess support for various EU budgetary assistance packages across five member states. A majority of packages are supported in all countries, although individual design features have significant effects on public approval. Importantly, it is possible to design packages such that they obtain majority support across all sampled countries, a key condition for success with policies of this kind.

Peter Klenow, Huiyu Li, 18 August 2020

There is much concern that the Covid-19 crisis may be particularly tough for relatively young firms to survive. Given that much innovation is attributed to young firms, this could then harm overall productivity. This column uses the dynamics of various firms’ market shares in order to infer their growth contributions. Compared to studies focusing on patents and R&D spending, the authors find a much bigger role for new and young firms in terms of accounting for productivity growth. Protecting young firms is therefore essential to mitigating the productivity damage of Covid-19.

Franziska Funke, David Klenert, 17 August 2020

COVID-19 and climate change share a marked similarity: the worst damage is only averted when society commits to decisive and early action in the face of a seemingly abstract threat. There are good reasons to believe climate change will be even harder to defeat, even though – or precisely because – there is more time to confront it. This column argues that the current pandemic is an exceptional opportunity to understand where the real challenges lie for progression on climate action – in garnering political will and public support. It provides key policy suggestions for the next wave of climate action. 

Reda Cherif, Fuad Hasanov, 15 August 2020

Lockdown measures, contact tracing, and widespread testing have dominated the policy responses of many countries to the Covid-19 crisis. This column argues that a universal testing and isolation policy is the most viable way to vanquish the pandemic. Its implementation requires an epidemiological, rather than clinical, approach to testing, and requires the ramping up of testing kit production in order to achieve a scale and speed that the market alone would fail to provide. The estimated cost of universal testing is dwarfed by its return, mitigating the economic fallout of the pandemic.

Michael Gapen, Jonathan Millar, Blerina Uruçi, Pooja Sriram, 14 August 2020

As the COVID-19 pandemic continues, US policymakers must consider containment measures while weighing adverse health outcomes against forgone economic activity. This column uses panel data to evaluate alternative strategies to keep COVID-19 in check. Viable options to keep new case counts on a downward trajectory without economically costly shutdowns include more testing (at least 1.8 million per day for the US, used in isolation) and either mask requirements or indoor-dining restrictions. The US is nowhere near the point where herd immunity alone can control infections.

Hie Joo Ahn, James Hamilton, 14 August 2020

The COVID-19 crisis in the US sent the unemployment rate soaring just as labour force participation crashed. A closer look at the data reveals several inconsistencies across labour force measures and the resulting unemployment estimates. This column highlights large discrepancies between the number of unemployment insurance claims and the count of unemployed in recent months, as well as in the number of people outside the labour force who wanted a job at the time. It argues that the actual unemployment rate was two percentage points higher prior to the pandemic than reported, and this gap has likely widened since the crisis.

Eudora Ribeiro, 12 August 2020

Fear and imposed isolation due to COVID-19 have raised alarms about the impact on mental health on a global scale. The severe anticipated global recession and substantial increases in unemployment and indebtedness are both risk factors for suicide. This column reviews past similar scenarios of pandemics and recessions and its links to suicide. The recipe for preventing suicide amidst the COVID-19 pandemic includes investment in mental healthcare, such as providing suicide prevention services, and active employment policies.

John McLaren, 11 August 2020

In the US, COVID-19 tends to magnify inequalities by disproportionately hitting minorities, particularly African Americans, who suffer from higher COVID-19 mortality rates. Higher rates of infection appear to be the cause rather than factors related to treatment. Using an indirect approach, this column uses census data to identify the socioeconomic factors that cause different racial groups to be differentially exposed to the virus. Very strong racial disparities in COVID-19 mortality rates are seen for African-American and First Nations populations. Occupation, income, poverty rates, or access to healthcare insurance appears to matter little. Pre-COVID-19 use of public transport, however, may be a significant factor.

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