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Disentangling Covid-19, Economic Mobility, and Containment Policy Shocks

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  • Annika Camehl
  • Malte Rieth

Abstract

We study the dynamic impact of Covid-19, economic mobility, and containment policy shocks. We use Bayesian panel structural vector autoregressions with daily data for 44 countries, identified through sign and zero restrictions. Incidence and mobility shocks raise cases and deaths significantly for two months. Restrictive policy shocks lower mobility immediately, cases after one week, and deaths after three weeks. Non-pharmaceutical interventions explain half of the variation in mobility, cases, and deaths worldwide. These flattened the pandemic curve, while deepening the global mobility recession. The policy tradeoff is 1 p.p. less mobility per day for 9% fewer deaths after two months.

Suggested Citation

  • Annika Camehl & Malte Rieth, 2021. "Disentangling Covid-19, Economic Mobility, and Containment Policy Shocks," Discussion Papers of DIW Berlin 1954, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1954
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    Cited by:

    1. Famiglietti, Matthew & Leibovici, Fernando, 2022. "The impact of health and economic policies on the spread of COVID-19 and economic activity," European Economic Review, Elsevier, vol. 144(C).
    2. Holtemöller, Oliver & Rieth, Malte, 2021. "Wirtschaftliche Mobilität dürfte nach Lockerung deutlich steigen – aber auch die Zahl der COVID-19-Fälle," IWH Policy Notes 3/2021, Halle Institute for Economic Research (IWH).
    3. Aquilante, Tommaso & Di Pace, Federico & Masolo, Riccardo M., 2022. "Exchange-rate and news: Evidence from the COVID pandemic," Economics Letters, Elsevier, vol. 213(C).
    4. Holtemöller, Oliver & Rieth, Malte, 2021. "Economic mobility likely to increase significantly after relaxation - but also number of COVID-19 cases," IWH Policy Notes 3/2021 (en), Halle Institute for Economic Research (IWH).

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    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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