Projecting the Economic Consequences of the COVID-19 Pandemic
The highly uncertain evolution of the COVID-19 pandemic, influenced in part by government actions, social behavior, and vaccine-related developments, will play a critical role in shaping the global recovery’s strength and durability. This paper dev...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/718991616433868772/Projecting-the-Economic-Consequences-of-the-COVID-19-Pandemic http://hdl.handle.net/10986/35304 |
| Summary: | The highly uncertain evolution of the
COVID-19 pandemic, influenced in part by government actions,
social behavior, and vaccine-related developments, will play
a critical role in shaping the global recovery’s strength
and durability. This paper develops a modeling approach to
embed pandemic scenarios and the rollout of a vaccine in a
macroeconometric model and illustrates the impact of
different pandemic- and vaccine-related assumptions on
growth outcomes. The pandemic and the measures to contain
it, including vaccine deployment, are assumed to be
represented by consumption shocks in a macroeconometric
model. In the baseline scenario, social distancing and a
gradual vaccination process allow policy makers to make
significant inroads in containing the pandemic. In a
downside scenario, insufficient pandemic control efforts
accompanied by delayed vaccination leads to persistently
higher infection levels and a materially worse growth
outcome. In contrast, in an upside scenario, effective
management of the pandemic combined with rapid vaccine
deployment would set the stage for stronger growth outcomes. |
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