Initial Output Losses from the COVID-19 Pandemic: Robust Determinants

54 Pages Posted: 9 Mar 2021

See all articles by Davide Furceri

Davide Furceri

International Monetary Fund (IMF)

Michael Ganslmeier

University of Oxford; University College London

Jonathan D. Ostry

Georgetown University; International Monetary Fund (IMF)

Naihan Yang

International Monetary Fund (IMF)

Multiple version iconThere are 3 versions of this paper

Date Written: January 2021

Abstract

While the COVID-19 pandemic is affecting all countries, output losses vary considerably across countries. We provide a first analysis of robust determinants of observed initial output losses using model-averaging techniques-Weighted Average Least Squares and Bayesian Model Averaging. The results suggest that countries that experienced larger output losses are those with lower GDP per capita, more stringent containment measures, higher deaths per capita, higher tourism dependence, more liberalized financial markets, higher pre-crisis growth, lower fiscal stimulus, higher ethnic and religious fractionalization and more democratic regimes. With respect to the first factor, lower resilience of poorer countries reflects the higher economic costs of containment measures and deaths in such countries and less effective fiscal and monetary policy stimulus.

JEL Classification: E02, G01, J10, E62, I12, I10, K31

Suggested Citation

Furceri, Davide and Ganslmeier, Michael and Ostry, Jonathan D. and Yang, Naihan, Initial Output Losses from the COVID-19 Pandemic: Robust Determinants (January 2021). IMF Working Paper No. 2021/018, Available at SSRN: https://ssrn.com/abstract=3799610

Davide Furceri (Contact Author)

International Monetary Fund (IMF) ( email )

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Michael Ganslmeier

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

University College London ( email )

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London, WC1E 6BT
United Kingdom

Jonathan D. Ostry

Georgetown University ( email )

Washington, DC 20057
United States

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Naihan Yang

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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