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Macroeconomic Implications of the Fight against COVID-19: First Estimates, Forecasts, and Conclusions

Author

Listed:
  • Victor Yotzov
  • Daniela Bobeva
  • Pobeda Loukanova
  • Nedialko Nestorov

Abstract

The COVID-19 pandemic has triggered a massive spike in uncertainty all over the world. Bulgaria is no exception. Major uncertainties surround almost every aspect of human life: the infectiousness, prevalence, and lethality of the virus; the capacity of healthcare systems to meet the challenge; how long it will take to develop ‘herd immunity’; how long and how strong should social distancing be; how long it will take to develop and deploy safe, effective vaccines etc. On top of all this comes the economic uncertainty. There is no doubt the pandemic is having immediately visible effects on economic activity. The rapid contraction in economic activity, the collapse of trade, and the dramatic increase in the unemployment rate are without precedent. Our goal here is to assess near-term macroeconomic effects of these COVID-induced uncertainties. To this end we look at the measures taken worldwide and in the EU in particular, focusing on Bulgaria’s main trading partners. We develop three different scenarios for the economic development by the end of 2020 based on different assumptions with regard to the severity of the external shock as well as the duration of the social distancing.

Suggested Citation

  • Victor Yotzov & Daniela Bobeva & Pobeda Loukanova & Nedialko Nestorov, 2020. "Macroeconomic Implications of the Fight against COVID-19: First Estimates, Forecasts, and Conclusions," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 3-28.
    • Handle: RePEc:bas:econst:y:2020:i:3:p:3-28
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    File URL: https://www.iki.bas.bg/Journals/EconomicStudies/2020/2020-3/1_Victor_f-f.pdf
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    Citations

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    Cited by:

    1. Lorenzo Pratici & Phillip McMinn Singer, 2021. "COVID-19 Vaccination: What Do We Expect for the Future? A Systematic Literature Review of Social Science Publications in the First Year of the Pandemic (2020–2021)," Sustainability, MDPI, vol. 13(15), pages 1-18, July.
    2. Dimitar Zlatinov & Ilia Atanasov, 2021. "Absolute and Conditional Convergence: A Story about Convergence Clubs and Divergence in the EU," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 39-55.
    3. Mariella Nenova, 2022. "Households’ Consumption Pattern and Saving – Evidence for the First Year of the Covid-19 Pandemic in Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 3-22.
    4. Galya Taseva, 2023. "Dynamics of the debt burden of non-financial enterprises in Bulgaria during the period 2016-2020," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 380-407.
    5. Tsvetomir Tsvetkov & Sonya Georgieva, 2021. "Anti-Crisis Macroeconomic Policy in the Conditions of COVID-19 in Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 107-130.

    More about this item

    JEL classification:

    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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