The economic consequences of COVID-19: Why no country can escape its impact

The economic consequences of COVID-19: Why no country can escape its impact

The pandemic is posing formidable challenges to policymakers, due to its global reach and impact.

Economists have used a multi-country econometric model, augmented with global volatility threshold variables, to measure COVID-19's impact.

It shows the global recession will be long lasting, with no country escaping its impact, regardless of their mitigation strategy.

As a result, multi-country policy responses are needed.



The Covid-19 pandemic is a global shock 'like no other', involving simultaneous disruptions to both supply and demand in an interconnected world economy. On the supply side, infections reduce labour supply and productivity, while lockdowns, business closures, and social distancing also cause supply disruptions. On the demand side, layoffs and the loss of income (from morbidity, quarantines, and unemployment) and worsened economic prospects reduce household consumption and firms'