The Impact of COVID-19 on Living Standards: Addressing the Challenges of Nowcasting Unprecedented Macroeconomic Shocks with Scant Data and Uncharted Economic Behavior

Nora Lustig, Valentina Pabon (), Federico Sanz () and Stephen Younger ()
Additional contact information
Valentina Pabon: Yale University
Federico Sanz: Equity Institute and the World Bank
Stephen Younger: Equity Institute

No 2206, Working Papers from Tulane University, Department of Economics

Abstract: We present a methodological approach with relatively low information requirements to quantify the impact of large, unprecedented macroeconomic shocks like the COVID-19 pandemic on living standards across the income distribution. The approach can be produced quickly and, contrary to other "fast-delivery" exercises, does not assume that income losses are proportional across the income distribution, a feature that is critical to understanding the impact on poverty and inequality. Our method is sufficiently flexible to refine the projected effects of the shock as more information becomes available. We illustrate with data from the four largest countries in Latin America: Argentina, Brazil, Colombia, and Mexico, and discuss the estimated effect of COVID-19 on inequality and poverty. We also present the guidelines for adapting our framework to different countries and economic shocks.

Keywords: COVID-19; inequality; poverty; mobility; microsimulations; Latin America (search for similar items in EconPapers)
JEL-codes: C63 D31 E27 I32 I38 (search for similar items in EconPapers)
Date: 2022-09
New Economics Papers: this item is included in nep-cmp and nep-lam
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http://repec.tulane.edu/RePEc/pdf/tul2206.pdf First Version, September 2022 (application/pdf)

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Journal Article: The Impact of COVID-19 on Living Standards: Addressing the Challenges of Nowcasting Unprecedented Macroeconomic Shocks with Scant Data and Uncharted Economic Behavior (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:tul:wpaper:2206

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