The Economic Effects of COVID-19 Containment Measures

This paper examines the economic effects of COVID-19 containment measures using daily global data on containment measures, infections, and economic activity indicators, such as Nitrogen Dioxide ( $${\mathrm{NO}}_{2})$$ emissions, international and domestic flights, energy consumption, maritime trade, and mobility indices. Results suggest that containment measures had a significant impact on economic activity—equivalent to about a 10 percent loss in industrial production over 30 days following their implementation. Easing of containment measures results in an increase in economic activity, but the effect is lower (in absolute value) to that of tightening. Fiscal measures used to mitigate the crisis were effective in partly offsetting these costs. We also find that school closures and cancellation of public events are among the most effective measures in curbing infections and are associated with low economic costs. Other highly effective measures like workplace closures and international travel restrictions are among the costliest in economic terms.