The Effects of COVID-19 Vaccines on Economic Activity

49 Pages Posted: 15 Nov 2021

See all articles by Pragyan Deb

Pragyan Deb

International Monetary Fund (IMF); London School of Economics & Political Science (LSE) - Financial Markets Group

Davide Furceri

International Monetary Fund (IMF)

Daniel Jiménez

International Monetary Fund (IMF)

Siddharth Kothari

International Monetary Fund (IMF)

Jonathan D. Ostry

Georgetown University; International Monetary Fund (IMF)

Nour Tawk

International Monetary Fund (IMF)

Multiple version iconThere are 2 versions of this paper

Date Written: October 2021

Abstract

This paper empirically examines the economic effects of COVID-19 vaccine rollouts using a cross-country daily database of vaccinations and high frequency indicators of economic activity-nitrogen dioxide (NO2) emissions, carbon monoxide (CO) emissions, and Google mobility indices-for a sample of 46 countries over the period December 16, 2020 to June 20, 2021. Using surprises in vaccines administered, we find that an unexpected increase in vaccination per capita is associated with a significant increase in economic activity. We also find evidence for non-linear effects of vaccines, with the marginal economic benefits being larger when vaccination rates are higher. Country-specific conditions play an important role, with lower economic gains if strict containment measures are in place or if the country is experiencing a severe outbreak. Finally, the results provide evidence of spillovers across borders, highlighting the importance of equitable access to vaccines across nations.

Keywords: containment measures, COVID-19, Pandemics, vaccinations

JEL Classification: C31, C33, E65, F4, O50

Suggested Citation

Deb, Pragyan and Furceri, Davide and Jiménez, Daniel and Kothari, Siddharth and Ostry, Jonathan D. and Tawk, Nour, The Effects of COVID-19 Vaccines on Economic Activity (October 2021). CEPR Discussion Paper No. DP16682, Available at SSRN: https://ssrn.com/abstract=3960286

Pragyan Deb (Contact Author)

International Monetary Fund (IMF) ( email )

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

London School of Economics & Political Science (LSE) - Financial Markets Group ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Davide Furceri

International Monetary Fund (IMF) ( email )

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

Daniel Jiménez

International Monetary Fund (IMF) ( email )

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

Siddharth Kothari

International Monetary Fund (IMF) ( email )

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

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

Nour Tawk

International Monetary Fund (IMF) ( email )

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

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