COVID-19: facts, figures, estimated relationships and analysis

Abstract

This study attempts an integrated analysis of the health and economic aspects of COVID-19 that is based on publicly available data from a wide range of data sources. The analysis is done keeping in mind the close interaction between the health and economic shocks of COVID-19. The study combines descriptive and qualitative approaches using figures and graphs with quantitative methods that estimate the plotted relationships and econometric estimation that attempts to explain cross-country variation in COVID-19 incidence, deaths and ‘case fatality rates’. The study seeks to answer a set of questions on COVID-19 such as: what are the economic effects of COVID-19, focussing on international inequality and global poverty? How effective was lockdown in curbing COVID-19? What was the effect of lockdown on economic growth? Did the stimulus packages work in delinking the health shocks from the economic ones? Did ‘better governed countries’ with greater public trust and those with superior health care fare better than others? Did countries that have experienced previous outbreaks such as SARS fare better than those who have not? The study provides mixed messages on the effectiveness of lockdowns in controlling COVID-19. While several countries, especially in the East Asia and Pacific region, have used it quite effectively recording low infection rates going into lockdown and staying low after the lockdown, the two spectacular failures are Brazil and India. In contrast to lockdown, the evidence on the effectiveness of stimulus programs in avoiding recession and promoting growth is unequivocal. The effectiveness is much greater in the case of emerging/developing economies than in the advanced economies. Multilateral institutions such as the World Bank and the IMF need to work out a coordinated strategy to declare immediate debt relief and provide additional liquidity to the poorer economies to help them announce effective stimulus measures. COVID-19 will lead to a large increase in the global pool of those living in ‘extreme poverty’. A poignant feature of our results is that while a significant share of health shocks from COVID-19 is borne by the advanced economies, the burden of ‘COVID-19 poverty’ will almost exclusively fall on two of the poorest regions, namely, Sub-Saharan Africa and South Asia.