COVID-19 Outbreak, Social Response, and Early Economic Effects: A Global VAR Analysis of Cross-Country Interdependencies

Fabio Milani

No 626, GLO Discussion Paper Series from Global Labor Organization (GLO)

Abstract: This paper studies the social and economic responses to the COVID-19 pandemic in a large sample of countries. I stress, in particular, the importance of countries' interconnections to un- derstand the spread of the virus. I estimate a Global VAR model and exploit a dataset on existing social connections across country borders. I show that social networks help explain not only the spread of the disease, but also cross-country spillovers in perceptions about coronavirus risk and in social distancing behavior. In the early phases of the pandemic, perceptions of coronavirus risk in most countries are affected by pandemic shocks originating in Italy. Later, the U.S., Spain, and the U.K. play sizable roles. Social distancing responses to domestic and global health shocks are heterogeneous; however, they almost always exhibit delays and sluggish adjustments. Unemploy- ment responses vary widely across countries. Unemployment is particularly responsive to health shocks in the U.S. and Spain, while unemployment uctuations are attenuated almost everywhere else.

Keywords: COVID-19 Pandemic; Health Shocks; Global VAR; Social Networks; Social Distancing; Cross-Country Spillovers; Unemployment Indicators; Google Trends (search for similar items in EconPapers)
JEL-codes: C32 F69 I12 I18 L86 Z13 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-net
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Citations: View citations in EconPapers (22)

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Related works:
Journal Article: COVID-19 outbreak, social response, and early economic effects: a global VAR analysis of cross-country interdependencies (2021)
Working Paper: Covid-19 Outbreak, Social Response, and Early Economic Effects: A Global VAR Analysis of Cross-Country Interdependencies (2020)
Working Paper: COVID-19 Outbreak, Social Response, and Early Economic Effects: A Global VAR Analysis of Cross-Country Interdependencies (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:glodps:626

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