Macroeconomic Outcomes and COVID-19: A Progress Report Jes us Fern - - PowerPoint PPT Presentation

Macroeconomic Outcomes and COVID-19: A Progress Report

Jes´ us Fern´ andez-Villaverde and Chad Jones September 24, 2020 Brookings Papers on Economic Activity

Overview

• Data on Lost GDP and Covid Deaths
• No simple tradeoff
• Complicated interaction: policy, history, luck, and timing
• Outline
• Simple framework
• Cumulative losses across countries, cities, and states
• Dynamics

Key Lesson: A heterogeneous set of places — Seoul, Tokyo, Germany, Norway — have good performance on both dimensions. We should study them!

1

Covid Deaths per Million People, September Seoul 5 Tokyo 25 Norway 50 Germany 100 San Francisco 200 NY excluding NYC 400 Florida, Italy, U.S., U.K., Brazil, Spain, London 600 Paris, Mississippi, Washington DC 800 Louisiana, Miami, Chicago, Philadelphia 1000 Madrid, Boston, Stockholm 1400 Lombardy, New Jersey 1700 New York City 2800

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Short-Term Trade Off

COVID DEATHS PER MILLION PEOPLE GDP LOSS (PERCENT)

Shut down economy Keep economy open

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Dynamics, Policy, and Luck Can Shift the Tradeoff

COVID DEATHS PER MILLION PEOPLE GDP LOSS (PERCENT)

Good policy

• r good luck

Bad policy

• r bad luck

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Putting together...

COVID DEATHS PER MILLION PEOPLE GDP LOSS (PERCENT)

Shut down economy Keep economy open Good policy

• r good luck

Bad policy

• r bad luck

5

International Covid Deaths and Lost GDP, 2020

100 200 300 400 500 600 700 800 900

• 1

1 2 3 4 5 6 7

United States Austria Belgium Brazil Chile Colombia Denmark France Germany Greece India Ireland Israel Italy Japan Korea, South Luxembourg Mexico Netherlands New Zealand Norway Philippines Poland Portugal Russia Singapore Slovakia Slovenia South Africa Spain Sweden Switzerland Taiwan Turkey United Kingdom China

COVID DEATHS PER MILLION PEOPLE GDP LOSS (PERCENT YEARS)

6

U.S. States: Covid Deaths and Cumulative Excess Unemployment

200 400 600 800 1000 1200 1400 1600 1800 2000 1 2 3 4 5 6 7

AK AR AZ CA CO CT DC DE FL GA HI ID IL IN KY LA MA MD ME MI MN MO MS MT NE NH NJ NM NV NY OH OR PA RI SC SD TN TX UT VT WA WI WV WY

COVID DEATHS PER MILLION PEOPLE CUMULATIVE EXCESS UNEMPLOYMENT (PERCENT YEARS)

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Google Mobility Reports Data

• Available daily, very disaggregated geographically, up to date
• In contrast to GDP and unemployment
• Use the retail and restaurants component
• Good correlation with other measures
• Correlation with GDP loss = 0.68
• Correlation with state excess unemployment = 0.69

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Google Activity Data for Key Global Cities

Feb Mar Apr May Jun Jul Aug Sep Oct 2020

• 100
• 80
• 60
• 40
• 20

20

Percent change relative to baseline

Lombardy NYC Madrid London Stockholm Seoul Tokyo Paris

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Google Activity Data for U.S. States

Feb Mar Apr May Jun Jul Aug Sep Oct 2020

• 80
• 60
• 40
• 20

20

Percent change relative to baseline

New York California Texas Arizona Florida D.C.

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Covid Deaths and Cumulative Google Activity

100 200 300 400 500 600 700 800 900 5 10 15 20 25 30

United States Italy Germany United Kingdom Sweden Norway Japan Korea, South Indonesia India Taiwan Mexico Portugal Austria Belgium Spain France Denmark Switzerland

COVID DEATHS PER MILLION PEOPLE CUMULATIVE REDUCED ACTIVITY(PERCENT YEARS)

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Global Cities: Covid Deaths and Cumulative Google Activity

500 1000 1500 2000 2500 3000 5 10 15 20 25 30 35 40

New York City Lombardy, Italy London Paris Madrid, Spain Stockholm Tokyo, Japan Seoul, Korea Boston Los Angeles SF Bay Area Miami Chicago Houston

COVID DEATHS PER MILLION PEOPLE CUMULATIVE REDUCED ACTIVITY(PERCENT YEARS) 12

Dynamics: Outcomes over Time

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Countries: Monthly Evolution from March to September

1 2 4 8 16 32 64 128 256 512 1024 2048 10 20 30 40 50 60 70 80

United States Italy Germany United Kingdom Sweden Norway

COVID DEATHS PER MILLION PEOPLE REDUCED ACTIVITY (PERCENT)

14

Countries: Monthly Evolution from March to September

1 2 4 8 16 32 64 128 256 512 1024 2048 10 20 30 40 50 60 70 80

Japan Korea, South Indonesia India Taiwan Mexico Portugal Austria Belgium Spain France Denmark Switzerland

COVID DEATHS PER MILLION PEOPLE REDUCED ACTIVITY (PERCENT) 15

Global Cities: Monthly Evolution from March to September

1 2 4 8 16 32 64 128 256 512 1024 2048 10 20 30 40 50 60 70 80 90

New York City Lombardy, Italy London Paris Madrid, Spain Stockholm Tokyo, Japan Seoul, Korea

COVID DEATHS PER MILLION PEOPLE REDUCED ACTIVITY (PERCENT) 16

Global Cities: Monthly Evolution from March to September

1 2 4 8 16 32 64 128 256 512 1024 2048 10 20 30 40 50 60 70 80

Boston Los Angeles SF Bay Area Miami Chicago Houston

COVID DEATHS PER MILLION PEOPLE REDUCED ACTIVITY (PERCENT)

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U.S. States: Monthly Evolution from March to September 1 2 4 8 16 32 64 128 256 512 1024 2048 15 20 25 30 35 40 45 50 55 60 65

NY DC CA PA MA NJ WA MI

COVID DEATHS PER MILLION PEOPLE REDUCED ACTIVITY (PERCENT)

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U.S. States: Monthly Evolution from March to September

1 2 4 8 16 32 64 128 256 512 1024 2048 5 10 15 20 25 30 35 40 45 50

FL TX AZ GA MT AL SD

COVID DEATHS PER MILLION PEOPLE REDUCED ACTIVITY (PERCENT) 19

Concluding Remarks

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Summary

COVID DEATHS GDP LOSS

California

[lucky? too tight?]

New York City Lombardy United Kingdom Madrid

[unlucky? bad policy?]

Sweden

[unlucky? too loose?]

Germany, Norway Japan, S. Korea China, Taiwan Kentucky, Montana

[lucky? good policy?]

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