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Covid-19, Policy Responses, And Industrial Productivity Around The Globe

Author

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  • Bernard Njindan Iyke

    (Asia-Pacific Applied Economics Association)

  • Susan Sunila Sharma

    (Deakin University)

  • Iman Gunadi

    (Bank Indonesia)

Abstract

We examine whether the COVID-19-induced policy responses by countries moderated the negative impact of the pandemic on industrial productivity. Using a panel of the 50 most affected countries by the pandemic, we show that the policy responses do not only help reduce the spread of COVID-19, but they also moderate its negative impact on industrial productivity and help steer countries back to their growth paths. We demonstrate that, in the absence of the pandemic, some of the policy responses (i.e., lockdowns, travel restrictions, etc.) would have reduced productivity. We further demonstrate that our estimates are robust when considering alternative specifications of our productivity model. Our study provides strong support for evidence-based policies and emphasizes, consistent with theoretical arguments, that an optimal policy mix is fundamental to steering economies back to their steady productivity growth paths when facing negative shocks.

Suggested Citation

  • Bernard Njindan Iyke & Susan Sunila Sharma & Iman Gunadi, 2021. "Covid-19, Policy Responses, And Industrial Productivity Around The Globe," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 24(3), pages 365-382, September.
    • Handle: RePEc:idn:journl:v:24:y:2021:i:3c:p:365-382
    DOI: https://doi.org/10.21098/bemp.v24i3.1691
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    Citations

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    Cited by:

    1. Behera, Harendra & Gunadi, Iman & Rath, Badri Narayan, 2023. "COVID-19 uncertainty, financial markets and monetary policy effects in case of two emerging Asian countries," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 173-189.
    2. Lin, Hang & Zhang, Zhengjun, 2022. "Extreme co-movements between infectious disease events and crude oil futures prices: From extreme value analysis perspective," Energy Economics, Elsevier, vol. 110(C).
    3. Wang, Hao & Xu, Ning & Yin, Haiyan & Ji, Hao, 2022. "The dynamic impact of monetary policy on financial stability in China after crises," Pacific-Basin Finance Journal, Elsevier, vol. 75(C).

    More about this item

    Keywords

    COVID-19; Novel coronavirus; Policy response indicators; Industrial productivity;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production

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