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The impact of containment measures across sectors and countries during the COVID-19 pandemic

Author

Listed:
  • Battistini, Niccolò
  • Stoevsky, Grigor

Abstract

This box shows how the economic impact of containment measures adopted in response to the pandemic differed across sectors and countries, and over time. The impact is assessed with a cross-sector vector autoregression (VAR) model. The results confirm that containment measures had a relatively large impact on sectors with non-teleworkable, contact-intensive occupations, such as recreational services. They also show that the impact of the measures varied across countries largely due to the different economic structures and containment policies. There is evidence that economic agents learned how to cope with the restrictions over time. This suggests that more targeted measures, coupled with behavioural responses by households and firms, helped limit the economic costs of containment policies during the renewed wave. Looking ahead, the large divergence in the economic impact of restrictions across sectors is likely to persist at least in the short term. JEL Classification: E23, E27, E32

Suggested Citation

  • Battistini, Niccolò & Stoevsky, Grigor, 2021. "The impact of containment measures across sectors and countries during the COVID-19 pandemic," Economic Bulletin Boxes, European Central Bank, vol. 2.
    • Handle: RePEc:ecb:ecbbox:2021:0002:4
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    File URL: https://www.ecb.europa.eu//pub/economic-bulletin/focus/2021/html/ecb.ebbox202102_04~eef0a56145.en.html
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    Citations

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    Cited by:

    1. Jana Hamdan & Yuanwei Xu, 2022. "COVID-19 Lockdown Compliance, Financial Stress, and Acceleration in Technology Adoption in Rural Uganda," Discussion Papers of DIW Berlin 2007, DIW Berlin, German Institute for Economic Research.
    2. repec:zbw:bofrdp:2022_001 is not listed on IDEAS
    3. Bighelli, Tommaso & Lalinsky, Tibor & Vanhala, Juuso, 2023. "Cross-country evidence on the allocation of COVID-19 government subsidies and consequences for productivity," Journal of the Japanese and International Economies, Elsevier, vol. 68(C).
    4. Erik Canton & Federica Colasanti & Jorge Durán & Maria Garrone & Alexandr Hobza & Wouter Simons & Anneleen Vandeplas, 2021. "The Sectoral Impact of the COVID-19 Crisis. An Unprecedented and Atypical Crisis," European Economy - Economic Briefs 069, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    5. Bighelli, Tommaso & Lalinsky, Tibor & Vanhala, Juuso, 2022. "Covid-19 pandemic, state aid and firm productivity," Bank of Finland Research Discussion Papers 1/2022, Bank of Finland.
    6. Bighelli, Tommaso & Lalinsky, Tibor & Vanhala, Juuso, 2022. "Covid-19 pandemic, state aid and firm productivity," Bank of Finland Research Discussion Papers 1/2022, Bank of Finland.
    7. Bole, Velimir & Prašnikar, Janez & Rop, Anton, 2023. "Support for those not affected: How macroeconomic policies have shaped COVID’s impact on sectoral activity," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 265-280.
    8. Cimadomo, Jacopo & Gordo Mora, Esther & Palazzo, Alessandra Anna, 2022. "Enhancing private and public risk sharing: lessons from the literature and reflections on the COVID-19 crisis," Occasional Paper Series 306, European Central Bank.

    More about this item

    Keywords

    COVID-19 economic impact; sectoral activity; time-varying parameters VAR;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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