Economic Effects of the COVID-19 Pandemic – Evidence from Panel Data in the EU
Palmén, Olli (2021-02-17)
Ministry of Finance
Julkaisusarja:Publications of the Ministry of Finance 2021:11
Julkaisun pysyvä osoite onhttp://urn.fi/URN:ISBN:978-952-367-524-7
Julkaisun muut kieliversiot:Suomeksi
The study evaluates the effects that the COVID-19 pandemic and the restrictions imposed to prevent its spread have on the economy. The study estimates a fixed effects model with different specifications for a total of 17 EU countries for which comparable data is available. The impact of the pandemic on the economy has been measured with both a general economic confidence indicator and a separate service sector confidence indicator. The severity of the epidemic has been measured by the demand for hospital care. In addition, the models include key variables that have been used to measure people's mobility, the number and type of restrictions imposed, and economic support measures. The main result of the study is that the increase in the need for hospital care by an average of 10 persons per month (per 1 million inhabitants) will reduce the general economic confidence indicator by about 0.21 points. In addition, the restrictions and mobility are found to have a significant effect on economic activity in some model specifications. The estimated model parameters may, subject to certain reservations, be used to assess cyclical trends in the economy when an evaluation of the macroeconomic impact of epidemic-related scenarios is required for decision-making.
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