Coronavirus Disease 2019 and the Global Economy

31 Pages Posted: 16 Mar 2020 Last revised: 26 Jun 2020

See all articles by HAKAN YILMAZKUDAY

HAKAN YILMAZKUDAY

Florida International University (FIU) - Department of Economics

Date Written: June 26, 2020

Abstract

Using daily data on the coronavirus disease 2019 (COVID-19) cases from China and the rest of the world (ROW), this paper investigates the corresponding effects on the global economic activity measured by the Baltic Exchange Dry Index (BDI). The empirical results based on a structural vector autoregression including crude oil prices (COP) suggest that a weekly increase of 1,000 in daily COVID-19 cases in China results in about 7% of a cumulative reduction in BDI after three months, whereas a weekly increase of 1,000 in daily COVID-19 cases in the rest of the world results in about 0.4% of a cumulative reduction in COP. The historical decomposition results further suggest that the oil price plunge starting from March 2020 is mostly explained by the corresponding OPEC disagreement.

Keywords: COVID-19, Coronavirus, Baltic Dry Index, Crude Oil Prices

JEL Classification: F60, I10

Suggested Citation

Yilmazkuday, Hakan, Coronavirus Disease 2019 and the Global Economy (June 26, 2020). Available at SSRN: https://ssrn.com/abstract=3554381 or http://dx.doi.org/10.2139/ssrn.3554381

Hakan Yilmazkuday (Contact Author)

Florida International University (FIU) - Department of Economics ( email )

11200 SW 8th Street
Miami, FL 33199
United States

HOME PAGE: http://faculty.fiu.edu/~hyilmazk/

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1,321
Abstract Views
5,418
rank
18,853
PlumX Metrics