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Covid-19 pandemic and economic performances of the states in India

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  • Goswami, Binoy
  • Mandal, Raju
  • Nath, Hiranya K.

Abstract

Using state-level aggregate data from India, this paper examines the impact of Covid-19 pandemic and its containment efforts on macroeconomic performance after controlling for several initial conditions, the structure of the state economies, and healthcare and public health capabilities. A panel regression analysis based on state-level monthly unemployment data from April to November 2020 indicates that states experiencing higher spread of Covid-19, with adverse initial economic conditions, and larger employment dependence on secondary and tertiary sector have suffered significantly larger economic losses. In contrast, states with better containment strategy, higher healthcare capabilities, and a relatively larger employment share of the primary sector have experienced smaller economic losses. Further, the nationwide lockdown during the months of April and May had significant adverse effects on the state economies. Finally, the spread of the virus interacts with each of the above factors to significantly impact state economic performances. These results are informative not only for policies and strategies for short and long-term recovery of the state economies in India but also for understanding actual and potential economic impacts of the pandemic acrosscountries.

Suggested Citation

  • Goswami, Binoy & Mandal, Raju & Nath, Hiranya K., 2021. "Covid-19 pandemic and economic performances of the states in India," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 461-479.
    • Handle: RePEc:eee:ecanpo:v:69:y:2021:i:c:p:461-479
    DOI: 10.1016/j.eap.2021.01.001
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    More about this item

    Keywords

    Covid-19; India; Positivity rate; Growth vulnerability; Case fatality rate;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • R59 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Other

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