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The economywide recovery measures in Rwanda during the COVID-19 pandemic: How useful a lesson?

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  • Aragie, Emerta
  • Diao, Xinshen
  • Spielman, David J.
  • Thurlow, James

Abstract

In response to the COVID-19 pandemic, governments in many low- and middle-income countries (LMICs) immediately introduced strict public health measures to contain the spread of infection. The economic consequences of these measures were negative and often large in magnitude, necessitating the rapid introduction of economic relief and recovery measures to reinvigorate economic growth and safeguard affected households. Rwanda stands out among other LMICs both for its effective public health policy response and its adaptive economic policy response to COVID-19. Using a dynamic computable general equilibrium (CGE) model of Rwanda, this paper assesses the economywide and welfare impacts of these policy measures and contextualizes results within the overall policy response to COVID-19. Modeling results generated at an early stage of Rwanda’s pandemic experience indicated that relief and recovery measures introduced in 2020 could mitigate COVID-19′s recessionary effects by about 0.8 % points of total GDP, help to recover about 115,000 jobs and, through cash transfers, significantly reduce income losses among poorer households, with total benefits from the measures exceeded their cost by a ratio of 2.2. These results demonstrate the widely replicable value of economywide modeling when used in a timely manner and when positioned within a policymaking process.

Suggested Citation

  • Aragie, Emerta & Diao, Xinshen & Spielman, David J. & Thurlow, James, 2024. "The economywide recovery measures in Rwanda during the COVID-19 pandemic: How useful a lesson?," Journal of Policy Modeling, Elsevier, vol. 46(6), pages 1103-1124.
    • Handle: RePEc:eee:jpolmo:v:46:y:2024:i:6:p:1103-1124
    DOI: 10.1016/j.jpolmod.2024.07.004
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    Keywords

    Economywide modeling; Impact analysis; COVID-19; Economic recovery measures; Rwanda;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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