The COVID-19 crisis: what explains cross-country differences in the pandemic’s short-term economic impact?

Lennart Niermann and Ingo Pitterle

MPRA Paper from University Library of Munich, Germany

Abstract: The COVID-19 pandemic has caused the most universal health and socio-economic crisis in recent history. However, the magnitude of the economic damage has differed widely; some countries were hit particularly hard, while others have managed to weather the storm much better. In this paper, we employ a cross-country analysis to identify factors that help explain the differences in the growth impact of the COVID-19 shock. Our findings underscore the critical role of balancing health and economic concerns in managing the pandemic as both a country’s exposure to the coronavirus and the stringency of containment measures are strongly correlated with its growth performance. In addition, our results shed light on several aspects of economic resilience. Good governance, provision of fiscal support and strong macroeconomic fundamentals all helped cushion the economic impact. By contrast, a lack of economic diversification – reflected in overreliance on the tourism sector or oil production – has significantly amplified the shock.

Keywords: COVID-19; growth performance; transmission of shocks; economic resilience (search for similar items in EconPapers)
JEL-codes: E61 E66 H12 H51 H63 I15 I18 O11 O47 (search for similar items in EconPapers)
Date: 2021-04
New Economics Papers: this item is included in nep-hea and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://mpra.ub.uni-muenchen.de/109165/1/MPRA_paper_109165.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:107414

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