Skip to main content
PMC home page
Springer Nature - PMC COVID-19 Collection logoLink to Springer Nature - PMC COVID-19 Collection
. 2021 Jan 26;56(1):32–39. doi: 10.1007/s10272-021-0948-y

COVID-19: Lockdowns, Fatality Rates and GDP Growth

Evidence for the First Three Quarters of 2020

Michael König 1,✉, Adalbert Winkler 1,✉
PMCID: PMC7836344  PMID: 33518787

Abstract

The COVID-19 pandemic has triggered an unprecedented economic crisis. This article analyses the impact of mandatory social distancing imposed by lockdown policies and voluntary social distancing triggered by COVID-19 fatality rates on GDP growth in the first three quarters of 2020 for a sample of 42 countries. OLS and IV results indicate an important role for the fatality rate, while panel regressions show that lockdown stringency is the more important driver of growth. When including lagged variables, more restrictive measures lead to lower GDP growth in the same quarter but are associated with a positive, catching-up effect in the following quarter.

Footnotes

Michael König, Frankfurt School of Finance & Management, FS UNEP Collaborating Centre for Climate & Sustainable Energy Finance, Germany.

Adalbert Winkler, Frankfurt School of Finance & Management, Germany.

Contributor Information

Michael König, Email: M.Koenig@fs.de.

Adalbert Winkler, Email: a.winkler@fs.de.

References

  1. Anckar D. Homogeneity and Smallness: Dahl and Tufte Revisited. Scandinavian Political Studies. 1999;22(1):29–44. doi: 10.1111/1467-9477.00002. [DOI] [Google Scholar]
  2. Barro, R. J., J. F. Ursúa and J. Weng (2020), The Coronavirus and the Great Influenza Pandemic: Lessons from the Spanish Flu for the Coronavirus Potential Effects on Mortality and Economic Activity, https://ideas.repec.org/p/nbr/nberwo/26866.html (8 January 2021).
  3. Bartik A W, Bertrand M, Cullen Z, Glaeser E L, Luca M, Stanton C. The impact of COVID-19 on small business outcomes and expectations. Proceedings of the National Academy of Sciences. 2020;117(30):17656–17666. doi: 10.1073/pnas.2006991117. [DOI] [PMC free article] [PubMed] [Google Scholar]
  4. Born B, Dietrich A, Müller G. Do lockdowns work? A counterfactual for Sweden. CEPR COVID Economics Vetted and Real-Time Papers. 2020;16:1–22. [Google Scholar]
  5. Brauner, J. M., S. Mindermann, M. Sharma, D. Johnston, J. Salvatier, T. Gavenčiak, A. B. Stephenson, G. Leech, G. Altman, V. Mikulik, A. J. Norman, J. Teperowski Monrad, T. Besiroglu, H. Ge, M. A. Hartwick, Y. W. Teh, L. Chindelevitch, Y. Gal and J. Kulveit (2020), Inferring the effectiveness of government interventions against COVID-19, Science. [DOI] [PMC free article] [PubMed]
  6. Carillo M, Jappelli T. Pandemics and local economic growth: Evidence from the Great Influenza in Italy. CEPR COVID Economics Vetted and Real-Time Papers. 2020;10:1–23. [Google Scholar]
  7. Dreger C, Gros D. Social Distancing Requirements and the Determinants of the COVID-19 Recession and Recovery in Europe. Intereconomics. 2020;55(6):365–371. doi: 10.1007/s10272-020-0935-8. [DOI] [PMC free article] [PubMed] [Google Scholar]
  8. Eichenbaum, M., S. Rebelo and M. Trabandt (2020), The Macroeconomics of Epidemics, National Bureau of Economic Research.
  9. Farboodi, M., G. Jarosch and R. Shimer (2020), Internal and External Effects of Social Distancing in a Pandemic, National Bureau of Economic Research.
  10. Gapen M, Millar J, Uruçi B, Sriram P. Assessing the effectiveness of alternative measures to slow the spread of COVID-19 in the United States. CEPR COVID Economics Vetted and Real-Time Papers. 2020;40:46–75. [Google Scholar]
  11. Gerring, J. and W. Veenendaal (2020), Population and politics: The impact of scale, Cambridge University Press.
  12. Goolsbee, A. and C. Syverson (2020), Fear, Lockdown, and Diversion: Comparing Drivers of Pandemic Economic Decline 2020, National Bureau of Economic Research. [DOI] [PMC free article] [PubMed]
  13. Gössling, S., D. Scott and C. M. Hall (2020), Pandemics, tourism and global change: a rapid assessment of COVID-19, Journal of Sustainable Tourism, 1–20.
  14. Gros, D. (2020), The great lockdown: was it worth it?, CEPS Policy Insights, 2020–11.
  15. Hale, T., N. Angrist, B. Kira, A. Petherick, T. Phillips and S. Webster (2020), Variation in government responses to COVID-19, BSG Working Paper Series, BSG-WP-2020/032.
  16. Huynh, T. L. D. (2020), The COVID-19 risk perception: A survey on socioeconomics and media attention, Economics Bulletin, 40(1).
  17. IMF (2020), World Economic Outlook, October 2020: A Long and Difficult Ascent, International Monetary Fund.
  18. Jordà, Ò., S. R. Singh and A. M. Taylor (2020), Longer-run economic consequences of pandemics, NBER Working Paper Series, w26934.
  19. König M, Winkler A. COVID-19 and Economic Growth: Does Good Government Performance Pay Off? Intereconomics. 2020;55(4):224–231. doi: 10.1007/s10272-020-0906-0. [DOI] [PMC free article] [PubMed] [Google Scholar]
  20. König M, Winkler A. Monitoring in real time: Cross-country evidence on the COVID-19 impact on GDP growth in the first half of 2020. CEPR COVID Economics Vetted and Real-Time Papers. 2020;57:132–153. [Google Scholar]
  21. Krueger, D., H. Uhlig and T. Xie (2020), Macroeconomic Dynamics and Reallocation in an Epidemic: Evaluating the “Swedish solution”, NBER Working Paper Series, 27047.
  22. Lane P R, Milesi-Ferretti G M. The Cross-Country Incidence of the Global Crisis. IMF Economic Review. 2011;59(1):77–110. doi: 10.1057/imfer.2010.12. [DOI] [Google Scholar]
  23. Maloney, W. and T. Taskin (2020), Determinants of social distancing and economic activity during COVID-19: A global view, World Bank Policy Research Working Paper, 9242.
  24. WHO (2021), WHO Coronavirus Disease (COVID-19) Dashboard, https://covid19.who.int/table (4 January 2021).
  25. Winkler A. COVID-19, Grippewellen und ökonomische Aktivität — die Perspektive der Wirkungsanalyse. Wirtschaftsdienst. 2020;100(5):344–350. doi: 10.1007/s10273-020-2655-x. [DOI] [PMC free article] [PubMed] [Google Scholar]

Articles from Inter Economics are provided here courtesy of Nature Publishing Group

RESOURCES