COVID-19, POLICY RESPONSES, AND INDUSTRIAL PRODUCTIVITY AROUND THE GLOBE

Bernard Njindan Iyke (), Susan Sunila Sharma () and Iman Gunadi
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Bernard Njindan Iyke: Asia-Pacific Applied Economics Association
Susan Sunila Sharma: Deakin University

Bulletin of Monetary Economics and Banking, 2021, vol. 24, issue 3, 365-382

Abstract: We examine whether the COVID-19-induced policy responses by countries moderated the negative impact of the pandemic on industrial productivity. Using a panel of the 50 most affected countries by the pandemic, we show that the policy responses do not only help reduce the spread of COVID-19, but they also moderate its negative impact on industrial productivity and help steer countries back to their growth paths. We demonstrate that, in the absence of the pandemic, some of the policy responses (i.e., lockdowns, travel restrictions, etc.) would have reduced productivity. We further demonstrate that our estimates are robust when considering alternative specifications of our productivity model. Our study provides strong support for evidence-based policies and emphasizes, consistent with theoretical arguments, that an optimal policy mix is fundamental to steering economies back to their steady productivity growth paths when facing negative shocks.

Keywords: COVID-19; Novel coronavirus; Policy response indicators; Industrial productivity (search for similar items in EconPapers)
JEL-codes: E23 I18 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:24:y:2021:i:3c:p:365-382

DOI: 10.21098/bemp.v24i3.1691

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