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Economic resiliency and recovery, lessons from the financial crisis for the COVID-19 pandemic: A regional perspective from Central and Eastern Europe

Josef Brada (), Pawel Gajewski and Ali Kutan ()

International Review of Financial Analysis, 2021, vol. 74, issue C

Abstract: In this paper we examine resiliency, the ability to absorb and recover from economic shocks, in 199 Nuts-3 regions in Central and Eastern Europe (CEE) following the 2008 global financial crisis. We find evidence of strong positive regional spillovers, meaning that regions tend to form clusters of high-performing and low-performing areas, a process that exacerbates regional income disparities. Using the experience of the recovery from the 2008 financial crisis, we simulate the effects of the COVID-19 pandemic on the ability of these, and, by extension, other upper-middle-income countries to recover from a shock to employment caused by the incidence of COVID-19. Using our recoverability equation estimates, we find that employment in no more than 31 of the 199 regions will have fully recovered in 2 years after the onset of the recovery from the crisis. Policy implications of the findings are discussed.

Keywords: Regional resiliency; Central and Eastern Europe; Economic recovery; Regional economics; COVID-19 (search for similar items in EconPapers)
JEL-codes: J61 J63 P25 R11 R12 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:74:y:2021:i:c:s1057521921000028

DOI: 10.1016/j.irfa.2021.101658

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