Business Cycle and Health Dynamics during the COVID-19 Pandemic: A Scandinavian Perspective

Hilde Bjørnland (), Malin C. Jensen and Leif Thorsrud

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: We use a unique measure of daily economic activity and manually audited non-pharmaceutical intervention indexes for Norway and Sweden to model the dynamics between COVID-19, policy, health, and business cycles within a SVAR framework. Our analysis documents large measurement errors in commonly used containment policy measures, significant endogeneity between the model’s variables, and a strong health-economy trade-off following both policy shocks and precautionary actions. We further document that a large share of the variation in containment policies is driven by news innovations and quantify via counterfactual simulations the output cost per life saved from following stricter versus softer policies.

Keywords: COVID-19; simultaneity; expectations; business cycles (search for similar items in EconPapers)
JEL-codes: E32 H51 I12 I15 I18 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2024-03
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Working Paper: Business Cycle and Health Dynamics during the COVID-19 Pandemic. A Scandinavian Perspective (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2024-19

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