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Disentangling COVID-19, Economic Mobility, and Containment Policy Shocks

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  • Annika Camehl
  • Malte Rieth

Abstract

We study the dynamic interaction between COVID-19, economic mobility, and containment policy. We use Bayesian panel structural vector autoregressions with daily data for 44 countries, identified through traditional and narrative sign restrictions. We find that incidence shocks and containment shocks have large and persistent effects on mobility, morbidity, and mortality that last for one to two months. These shocks are the main drivers of the pandemic, explaining between 20 and 60 percent of the average and historical variability in mobility, cases, and deaths worldwide. The policy trade-off associated to nonpharmaceutical interventions is 1 pp less economic mobility per day for 8 percent fewer deaths after 3 months.

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  • Annika Camehl & Malte Rieth, 2023. "Disentangling COVID-19, Economic Mobility, and Containment Policy Shocks," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(4), pages 217-248, October.
    • Handle: RePEc:aea:aejmac:v:15:y:2023:i:4:p:217-48
    DOI: 10.1257/mac.20210071
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    4. Baumeister, Christiane & Hamilton, James D., 2018. "Inference in structural vector autoregressions when the identifying assumptions are not fully believed: Re-evaluating the role of monetary policy in economic fluctuations," Journal of Monetary Economics, Elsevier, vol. 100(C), pages 48-65.
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    Cited by:

    1. Hilde C. Bjørnland & Malin C. Jensen & Leif Anders Thorsrud, 2023. "Business Cycle and Health Dynamics during the COVID-19 Pandemic. A Scandinavian Perspective," Working Papers No 15/2023, Centre for Applied Macro- and Petroleum economics (CAMP), BI Norwegian Business School.

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    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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