Vu Minh Ngo, Klaus F. Zimmermann, Phuc V. Nguyen, Toan L.D. Huynh, Huan Huu Nguyen, 25 January 2022

Because vaccinations are crucial to containing the COVID-19 pandemic, it is important to identify the key factors behind successful immunisation campaigns. This column shows that pandemic pressures, economic strength, educational advancement, and political regimes can affect vaccination uptake, given vaccine availability. While democratic regimes initially show faster vaccination uptake, this advantage fades out as countries try to get more people vaccinated. Countries with strong economies and education systems are likely to have faster uptake of vaccination campaigns.

Gian Maria Milesi-Ferretti, 24 January 2022

International travel and tourism collapsed during Covid-19. Gian Maria Milesi-Ferretti sets out the impact has this had on countries that depend most on tourism.

Read more about the research behind this and download the free DP:
Milesi-Ferretti, G. 2021. 'The Travel Shock'. CEPR

Francesco Agostinelli, Matthias Doepke, Giuseppe Sorrenti, Fabrizio Zilibotti, 21 January 2022

How have school closures during the Covid-19 pandemic affected children's education? This column argues that channels operating through schools, peer effects, and parental investments have all contributed to massively growing educational inequality during the pandemic. Among 9th graders, children from low-income neighbourhoods in the US are predicted to suffer a learning loss equivalent to almost half a point on the four-point GPA scale, whereas children from high-income neighbourhoods remain unscathed.

Christos Axioglou, Przemyslaw Wozniak, 18 January 2022

Shortages in material and equipment weighed heavily on activity and sentiment in the European economy in 2021. This column uses cross-country and cross-sector data from the European Commission’s Business and Consumer Surveys and finds a strong negative relationship between shortages and industrial output. Shortages appear to have detracted some 5 percentage points from the EU manufacturing output growth between January and October 2021. Output losses are heavily concentrated in Germany (around half of the impact) and in a handful of sectors, with the EU-wide motor vehicle and machinery and equipment sectors accounting for a third of the impact. 

Antonin Bergeaud, Jean Benoit Eymeoud, Thomas Garcia, Dorian Henricot, 18 January 2022

As employers and employees established ways of working remotely to limit physical interaction during outbreaks of Covid-19, teleworking became increasingly routine. This column examines how corporate real-estate market participants adjusted to the growth of teleworking in France, and finds that it has already made a noticeable difference in office markets. In départements more exposed to telework, the pandemic prompted higher vacancy rates, less construction, and lower prices. Forward-looking indicators suggest that market participants believe the shift to teleworking will endure.

Stefano Agresti, Flavio Calvino, Chiara Criscuolo, Francesco Manaresi, Rudy Verlhac, 17 January 2022

Business dynamism is key for creative destruction and to foster resource reallocation – both crucial elements of long-run economic growth. This column uses a new data visualisation tool to reveal large sector- and country-level heterogeneity in the impact on business dynamism of the COVID-19 crisis in 2020 and in recovery. Initially, firm entry fell sharply in all countries, but the pace of recovery varied across countries. Bankruptcies fell and remained below pre-crisis levels well into 2021. The tool allows users to monitor the evolution of key indicators over the recovery period, keeping track of sector-specific patterns.

Michael Kumhof, Nicolaus Tideman, Michael Hudson, Charles Goodhart, 14 January 2022

Land’s share in economies’ nonfinancial assets equals between 40% and 60%, and in the US currently equals over 50%. This constitutes a very large base for a non-distortionary tax. This column suggests that a 5-percentage point or larger increase in the tax rate on the value of US land, excluding buildings and equipment situated on the land, balanced by decreases in the tax rates on incomes from labour and from buildings and equipment (and in the limit by their complete elimination), would increase output by 15% to 25%.

Janice Eberly, Jonathan Haskel, Paul Mizen, 13 January 2022

The impact of an economic shock depends both on its severity and the resilience of the response. The COVID-19 pandemic caused a widespread decline in recorded GDP, but this was buffered by an unprecedented and spontaneous deployment of ‘potential capital’ – the dwelling/residential capital and connective technologies used while working from home. This column estimates that together, potential capital and labour working from home provided additional output margins and capacity which roughly halved the decline in GDP in the US and revises downwards the estimated total productivity gains in the business sector during the pandemic.

Alan Auerbach, Yuriy Gorodnichenko, Peter B. McCrory, Daniel Murphy, 23 December 2021

The Covid-19 pandemic prompted an unprecedented fiscal stimulus by many governments to counter the economic recession. This column uses high-frequency data on government spending, lockdown restrictions, and economic indicators in the US to assess the effectiveness of fiscal policy. It shows that government spending increased employment, but only in cities not subject to strict stay-at-home restrictions. It also shows that consumer spending shifted strongly toward durable goods during the pandemic. Well-targeted fiscal measures will be crucial in the case of another recessionary outbreak, especially transfers to firms on the brink of exit. 

Kristin Forbes, Joseph Gagnon, Christopher G. Collins, 21 December 2021

COVID-19 and the corresponding policy responses have generated uncertainty over inflation around the world. This column shows that when output exceeds potential, the upward pressure on prices (from reductions in slack) is far greater than any equivalent downward pressure (from increases in slack) when output is below potential. This nonlinearity in the Phillips curve, combined with the impact of global factors such as global commodity prices, global slack, exchange rates, and producer price competition, have played an important role in driving the sharp swings in inflation rates during COVID.

Ilan Goldfajn, Eduardo Levy Yeyati, 20 December 2021

The impact of the Covid-19 pandemic in Latin America highlighted the challenge of long-standing fiscal and social deficits in a context of overstretched public sector resources. And it deepened a growing discontent with the economic status quo and the political system. A new CEPR eBook collects a series of conversations with distinguished Latin American researchers and policymakers aimed at trying to map a possible future for Latin America, with a focus on avoiding the next crisis, policies for sustainable growth, social challenges, and the future of democracy.  

Matthieu Crozet, Banu Demir, Beata Javorcik, 20 December 2021

Global trade fell sharply during the first few months of the Covid-19 pandemic. This column analyses the use of letters of credit to insure trade flows during the crisis. Using product-specific data on reliance on trade insurance, it demonstrates that trade flows insured by letters of credit were more resilient than other flows. In general, the impact of letters of credit are stronger for exports to countries with a high number of Covid-19 cases. The significant effects of trade insurance thus suggest that uncertainty played an important role in driving the trade collapse in 2020.

Julio Ortiz, 17 December 2021

Just-in-time production has contributed to the decline in inventory holdings over the last several decades. Using US firm-level data, this column argues that just-in-time production creates a trade-off between firm profitability and vulnerability to large unexpected shocks. The theoretical analysis indicates that just-in-time production raises firm value by 1.3%. At the same time, amid a widespread supply disruption, a leaner economy experiences a deeper output contraction.

Han Wang, Andrés Rodríguez-Pose, 16 December 2021

Variation in the incidence of pandemics among cities has often been attributed to luck, rather than to institutional factors. This column examines how the Black Death – the deadliest of pandemics – differently impacted European cities in the 14th century. City autonomy, which allowed the independent introduction of counter-measures, reduced the plague’s death toll, on average, by almost 10%. Being a capital city, hosting a parliament, or having a bishop or an archbishop did not produce similar benefits. Improving the quality of local institutions can be an efficient mechanism to fight pandemics, even today. 

Yann Algan, Daniel Cohen, Eva Davoine, Martial Foucault, Stefanie Stantcheva, 15 December 2021

During the Covid-19 pandemic, social compliance with non-pharmaceutical interventions has varied within and across nations, and has generally decreased over time. This column uses data from 12 countries between March and December 2020 to show that trust in scientists plays a key role in compliance with and support for non-pharmaceutical interventions and willingness to get vaccinated, while trust in government has a more limited effect. However, when people associate scientists and scientific bodies with government action and political decision-making, it erodes their trust in these scientific institutions.

Shusaku Sasaki, Tomoya Saito, Fumio Ohtake, 13 December 2021

Vaccination promotion is crucial to ending the Covid-19 pandemic. This column reports on an experiment in Japan examining whether people altered their vaccination intentions based on information about how their decision could affect vaccine uptake by others. Hearing that getting vaccinated could encourage uptake by others around them increased the proportion of older adults who would receive the vaccine if offered for free, while hearing that not getting vaccinated may discourage uptake by others strengthened the intention to get vaccinated among older adults who had already indicated their willingness to be vaccinated. Finally, hearing how likely others of a similar age were to get vaccinated also strengthened existing intentions – whether pro- or anti-vaccination. The ‘nudges’ did not appear to have an effect on younger adults. 

Pragyan Deb, Davide Furceri, Daniel Jiménez, Siddharth Kothari, Jonathan D. Ostry, Nour Tawk, 13 December 2021

Cross-country health spillovers from vaccine rollouts mean the pandemic will not be over anywhere until it is over everywhere. This column argues that the success of a country’s vaccine deployment in the first half of 2021 was driven by five primary factors: the severity of its pandemic waves in 2020, its procurement strategies, the quantity of locally produced vaccines, the quality of health infrastructure, and vaccine acceptance. Swift and broad administration of vaccines provides a significant boost to health outcomes, particularly in the midst of major outbreaks and accompanied by containment measures. 

Kieran Mc Morrow , François Blondeau, Francesca D’Auria, Björn Döhring, Atanas Hristov, Christoph Maier, Anna Thum-Thysen, 10 December 2021

Strong policy actions have dampened the impact of Covid-19 on workers and businesses. Amid a rapid recovery, dents to potential output are set to remain limited and transitory. But many uncertainties persist and some economic scarring from the pandemic may only emerge over the coming years. This column summarises the insights from a recent conference on the implications of the Covid-19 recession for the EU’s growth potential. 

Tom Y. Chang, Mireille Jacobson, Manisha Shah, Rajiv Pramanik, Samir B. Shah, 08 December 2021

In the race to protect health and economies from COVID-19, governments must convince vaccine-hesitant populations to get jabbed. This column reports on a study in which unvaccinated members of a Medicaid-managed healthcare plan in the US were offered either financial incentives, different public health messages, or a simple vaccination appointment scheduler. None of the schemes increased overall vaccination rates in this vaccine-hesitant population. Improving take-up may likely require stronger policy levers, from employer rules to government mandates.

Oriana Bandiera, Erica Bosio, Giancarlo Spagnolo, 10 December 2021

A new CEPR ebook examines how public procurement, especially in an emergency, can cut red tape without increasing corruption and waste. Editors Erica Bosio, Giancarlo Spagnolo, and Oriana Bandiera explain what Covid-19 and other recent events have taught us.

Download the eBook:
Oriana Bandiera, Erica Bosio, Giancarlo Spagnolo Procurement in Focus: Rules, Discretion, and Emergencies, CEPR

Register for the online eBook launch on 15 December 14:00 GMT

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