Projecting the Economic Consequences of the COVID-19 Pandemic

The highly uncertain evolution of the COVID-19 pandemic, influenced in part by government actions, social behavior, and vaccine-related developments, will play a critical role in shaping the global recovery’s strength and durability. This paper develops a modeling approach to embed pandemic scenarios and the rollout of a vaccine in a macroeconometric model and illustrates the impact of different pandemic- and vaccine-related assumptions on growth outcomes. The pandemic and the measures to contain it, including vaccine deployment, are assumed to be represented by consumption shocks in a macroeconometric model. In the baseline scenario, social distancing and a gradual vaccination process allow policy makers to make significant inroads in containing the pandemic. In a downside scenario, insufficient pandemic control efforts accompanied by delayed vaccination leads to persistently higher infection levels and a materially worse growth outcome. In contrast, in an upside scenario, effective management of the pandemic combined with rapid vaccine deployment would set the stage for stronger growth outcomes.

Bibliographic Details

Main Authors:	Guenette, Justin-Damien, Yamazaki, Takefumi
Format:	Working Paper biblioteca
Language:	English
Published:	World Bank, Washington, DC 2021-03
Subjects:	CORONAVIRUS, COVID-19, PANDEMIC IMPACT, ECONOMIC SHOCK, BUSINESS CYCLE, ECONOMETRIC MODEL,
Online Access:	http://documents.worldbank.org/curated/en/718991616433868772/Projecting-the-Economic-Consequences-of-the-COVID-19-Pandemic https://hdl.handle.net/10986/35304
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