The effect of policy response to the COVID-19 pandemic on GDP growth, an analysis with variations over time

Abstract

The study is aimed at exploring the effect of three policies, social distancing, economic support to households and business, and vaccination on GDP, adopted by governments to mitigate the effects of the of COVID-19 pandemic. The analysis applies a data set scoping from the first quarter of 2020 to the third quarter of 2021 across OECD countries. The methodology incorporates interactive time dummy variables to capture variations of the effects over time; in addition, control factors comprising social, medical, demographic, besides health service sufficiency are incorporated in the analysis to disentangle the effect of policy response variables. The result indicates that the impact of policies can vary over time and hence, it is important the governments conduct strategies to keep effectiveness of the policies.