Projecting the Economic Consequences of the COVID-19 Pandemic

Justin-Damien Guenette and Takefumi Yamazaki

No 9589, Policy Research Working Paper Series from The World Bank

Abstract: The highly uncertain evolution of the COVID-19 pandemic, influenced in part by government actions, social behavior, and vaccine-related developments, will play a critical role in shaping the global recovery’s strength and durability. This paper develops a modeling approach to embed pandemic scenarios and the rollout of a vaccine in a macroeconometric model and illustrates the impact of different pandemic- and vaccine-related assumptions on growth outcomes. The pandemic and the measures to contain it, including vaccine deployment, are assumed to be represented by consumption shocks in a macroeconometric model. In the baseline scenario, social distancing and a gradual vaccination process allow policy makers to make significant inroads in containing the pandemic. In a downside scenario, insufficient pandemic control efforts accompanied by delayed vaccination leads to persistently higher infection levels and a materially worse growth outcome. In contrast, in an upside scenario, effective management of the pandemic combined with rapid vaccine deployment would set the stage for stronger growth outcomes.

Keywords: Public Health Promotion; Disease Control&Prevention; Early Child and Children's Health; Reproductive Health; Immunizations; International Trade and Trade Rules; Macroeconomic Management (search for similar items in EconPapers)
Date: 2021-03-22
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:9589

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