The relationship between pandemic containment measures, mobility and economic activity

Corinna Ghirelli, María Gil, Samuel Hurtado () and Alberto Urtasun
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María Gil: Banco de España
Samuel Hurtado: Banco de España

No 2109, Occasional Papers from Banco de España

Abstract: This paper first constructs a regional-scale indicator that seeks to gauge the volume of measures implemented at each point in time to contain the pandemic. Using textual analysis techniques, we analyse the information in press news. At the start of the pandemic, measures were taken in a centralised fashion; but from June, regional differences began to be seen and increased in the final stretch of the year. Second, using linear estimates, with monthly data and a level of regional disaggregation, the paper documents how most of the reduction in mobility observed in Spain has been due to the restrictions imposed. However, there has been a perceptible change in this relationship over recent months. In the early stages of the pandemic, the reduction in mobility was found to be greater than would be inferred by the restrictions approved. That is to say, at the outset there was apparently some voluntary reduction in mobility. Yet following lockdown-easing, the behaviour of mobility has fitted more closely with what might be attributed to the containment measures in force. Finally, the findings in the paper suggest that most of the decline in economic activity since the start of the crisis can be explained by the reductions observed in mobility. The analysis considers only the short-term effects on activity, which is very useful for preparing the projections on GDP behaviour in the current quarter. Conversely, the methodological approach pursued does not allow for evaluation of the effect of the pandemic containment measures on activity over longer time horizons. In particular, the adverse impact on the economy’s output that occurs concurrently as a result of the restrictions may be countered in the medium term by an effect of the opposite sign, to the extent that the restrictions imposed today may serve to prevent other more forceful ones in the future.

Keywords: nowcasting; GDP; economic activity; textual analysis; sentiment indicators; soft indicators; pandemic; COVID-19; coronavirus; mobility; restrictions; panel data (search for similar items in EconPapers)
JEL-codes: C23 C53 E32 E37 I12 I18 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2021-03
New Economics Papers: this item is included in nep-eur, nep-hea and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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https://www.bde.es/f/webbde/SES/Secciones/Publicac ... 21/Files/do2109e.pdf First version, March 2021 (application/pdf)
https://www.bde.es/f/webbde/SES/Secciones/Publicac ... s/21/Fich/do2109.pdf Spanish version (application/pdf)

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