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The Impact of COVID-19 on Living Standards: Addressing the Challenges of Nowcasting Unprecedented Macroeconomic Shocks with Scant Data and Uncharted Economic Behavior

Author

Listed:
  • Nora Lustig

    (Samuel Z. Stone Professor of Latin American Economics in the Department of Economics at Tulane University, and Director of the Commitment to Equity Institute at Tulane University, New Orleans, United States)

  • Valentina Martinez Pabon

    (Postdoctoral associate at Yale University, New Haven, United States)

  • Federico Sanz

    (Consultant of the Commitment to Equity Institute and the World Bank, Washington, United States)

  • Stephen D Younger

    (Consultant of the Commitment to Equity Institute, Ithaca, United States)

Abstract

We present a methodological approach with relatively low information requirements to quantify the impact of large, unprecedented macroeconomic shocks like the COVID-19 pandemic on living standards across the income distribution. The approach can be produced quickly and, contrary to other "fast-delivery" exercises, does not assume that income losses are proportional across the income distribution, a feature that is critical to understanding the impact on poverty and inequality. Our method is sufficiently flexible to refine the projected effects of the shock as more information becomes available. We illustrate with data from the four largest countries in Latin America: Argentina, Brazil, Colombia, and Mexico, and discuss the estimated effect of COVID-19 on inequality and poverty. We also present the guidelines for adapting our framework to different countries and economic shocks.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Nora Lustig & Valentina Martinez Pabon & Federico Sanz & Stephen D Younger, 2023. "The Impact of COVID-19 on Living Standards: Addressing the Challenges of Nowcasting Unprecedented Macroeconomic Shocks with Scant Data and Uncharted Economic Behavior," International Journal of Microsimulation, International Microsimulation Association, vol. 16(1), pages 1-27.
    • Handle: RePEc:ijm:journl:v:16:y:2023:i:1:p:1-27
    DOI: 10.34196/ijm.00273
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    Cited by:

    1. is not listed on IDEAS
    2. Zuobao Wang & Yao Chen & Tianrun Lin & Xinyi Xing, 2024. "The Dynamics of Inequality and Poverty Among Children in Colombia During the COVID-19 Recession," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 17(2), pages 815-843, April.

    More about this item

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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