What Determines Social Distancing? Evidence from Advanced and Emerging Market Economies
What Determines Social Distancing? Evidence from Advanced and Emerging Market Economies

Author: Ms. Era Dabla-Norris

Publisher: International Monetary Fund

Published: 2021-05

Total Pages: 36

ISBN-13: 1513582380

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The health and economic consequences of COVID-19 are closely tied to individual compliance with recommended protective behaviors. We examine the determinants of this compliance using survey data from the COVID Behavior Tracker for 29 advanced and emerging market economies between March and December 2020. Social distancing behaviors vary significantly by age, gender, occupation, and individual beliefs about COVID-19. In addition, those who trust their government’s response to COVID-19 are significantly more likely to adopt recommended behaviors and to self-isolate if advised, highlighting the need for well-coordinated actions on the health and economic fronts. We also find that mobility restrictions, such as stay-at-home orders, and mask mandates are associated with reduced social interactions and persistent increases in compliance. Together, these drivers account for over two-thirds of the regional differences in compliance, confirming their important role in increasing social distancing and containing the pandemic.

COVID-19 and Emerging Markets
COVID-19 and Emerging Markets

Author: Cem Çakmaklı

Publisher:

Published: 2020

Total Pages:

ISBN-13:

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Abstract: We quantify the macroeconomic effects of COVID-19 for a small open economy by calibrating a SIR-multi-sector-macro model to Turkey. Sectoral supply shocks are based on the proximity requirements in each sector and the ability to work from home. Physical proximity determines the supply shock through its effect on infection rates. Sectoral demand shocks incorporate domestic and foreign demand, both of which adjust with infection rates. We calibrate demand shocks during COVID-19 using real-time credit card purchase data. Our results show that the optimal policy, which yields the lowest economic cost and saves the maximum number of lives, can be achieved under a full lockdown of 39 days. Economic costs are much larger for an open economy as the shocks are amplified through the international production network. A decline in foreign demand leads to losses in domestic sectors through international input-output linkages, accounting for a third of the total output loss. In addition, the reduction in capital flows deprives the network from its trade financing needs, where sectors with larger external finance needs experience larger losses. The policy options are limited given sparse fiscal resources to fight the pandemic domestically, while serving the external debt. We present historical evidence from 2001 crisis of Turkey, when fiscal, monetary and exchange rate policies were employed altogether to deal with a triple crisis of balance of payments, banking, and sovereign debt

After-Effects of the COVID-19 Pandemic: Prospects for Medium-Term Economic Damage
After-Effects of the COVID-19 Pandemic: Prospects for Medium-Term Economic Damage

Author: Mr. Philip Barrett

Publisher: International Monetary Fund

Published: 2021-07-30

Total Pages: 23

ISBN-13: 1513587900

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The COVID-19 pandemic has led to a severe global recession with differential impacts within and across countries. This paper examines the possible persistent effects (scarring) of the pandemic on the economy and the channels through which they may occur. History suggests that deep recessions often leave long-lived scars, particularly to productivity. Importantly, financial instabilities—typically associated with worse scarring—have been largely avoided in the current crisis so far. While medium-term output losses are anticipated to be lower than after the global financial crisis, they are still expected to be substantial. The degree of expected scarring varies across countries, depending on the structure of economies and the size of the policy response. Emerging market and developing economies are expected to suffer more scarring than advanced economies.

The Promise of Fintech
The Promise of Fintech

Author: Ms.Ratna Sahay

Publisher: International Monetary Fund

Published: 2020-07-01

Total Pages: 83

ISBN-13: 1513512242

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Technology is changing the landscape of the financial sector, increasing access to financial services in profound ways. These changes have been in motion for several years, affecting nearly all countries in the world. During the COVID-19 pandemic, technology has created new opportunities for digital financial services to accelerate and enhance financial inclusion, amid social distancing and containment measures. At the same time, the risks emerging prior to COVID-19, as digital financial services developed, are becoming even more relevant.

World Economic Outlook, October 2020
World Economic Outlook, October 2020

Author: International Monetary Fund. Research Dept.

Publisher: INTERNATIONAL MONETARY FUND

Published: 2020-10-13

Total Pages: 203

ISBN-13: 9781513556055

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The global economy is climbing out from the depths to which it had plummeted during the Great Lockdown in April. But with the COVID-19 pandemic continuing to spread, many countries have slowed reopening and some are reinstating partial lockdowns to protect susceptible populations. While recovery in China has been faster than expected, the global economy’s long ascent back to pre-pandemic levels of activity remains prone to setbacks.

The COVID-19 Impact on Corporate Leverage and Financial Fragility
The COVID-19 Impact on Corporate Leverage and Financial Fragility

Author: Sharjil M. Haque

Publisher: International Monetary Fund

Published: 2021-11-05

Total Pages: 51

ISBN-13: 1589064127

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We study the impact of the COVID-19 recession on capital structure of publicly listed U.S. firms. Our estimates suggest leverage (Net Debt/Asset) decreased by 5.3 percentage points from the pre-shock mean of 19.6 percent, while debt maturity increased moderately. This de-leveraging effect is stronger for firms exposed to significant rollover risk, while firms whose businesses were most vulnerable to social distancing did not reduce leverage. We rationalize our evidence through a structural model of firm value that shows lower expected growth rate and higher volatility of cash flows following COVID-19 reduced optimal levels of corporate leverage. Model-implied optimal leverage indicates firms which did not de-lever became over-leveraged. We find default probability deteriorates most in large, over-leveraged firms and those that were stressed pre-COVID. Additional stress tests predict value of these firms will be less than one standard deviation away from default if cash flows decline by 20 percent.

Gender and Employment in the COVID-19 Recession: Evidence on “She-cessions”
Gender and Employment in the COVID-19 Recession: Evidence on “She-cessions”

Author: Mr. John C Bluedorn

Publisher: International Monetary Fund

Published: 2021-03-31

Total Pages: 24

ISBN-13: 1513575929

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Early evidence on the pandemic’s effects pointed to women’s employment falling disproportionately, leading observers to call a “she-cession.” This paper documents the extent and persistence of this phenomenon in a quarterly sample of 38 advanced and emerging market economies. We show that there is a large degree of heterogeneity across countries, with over half to two-thirds exhibiting larger declines in women’s than men’s employment rates. These gender differences in COVID-19’s effects are typically short-lived, lasting only a quarter or two on average. We also show that she-cessions are strongly related to COVID-19’s impacts on gender shares in employment within sectors.

World Economic Outlook, April 2019
World Economic Outlook, April 2019

Author: International Monetary Fund. Research Dept.

Publisher: International Monetary Fund

Published: 2019-04-09

Total Pages: 216

ISBN-13: 1484397487

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After strong growth in 2017 and early 2018, global economic activity slowed notably in the second half of last year, reflecting a confluence of factors affecting major economies. China’s growth declined following a combination of needed regulatory tightening to rein in shadow banking and an increase in trade tensions with the United States. The euro area economy lost more momentum than expected as consumer and business confidence weakened and car production in Germany was disrupted by the introduction of new emission standards; investment dropped in Italy as sovereign spreads widened; and external demand, especially from emerging Asia, softened. Elsewhere, natural disasters hurt activity in Japan. Trade tensions increasingly took a toll on business confidence and, so, financial market sentiment worsened, with financial conditions tightening for vulnerable emerging markets in the spring of 2018 and then in advanced economies later in the year, weighing on global demand. Conditions have eased in 2019 as the US Federal Reserve signaled a more accommodative monetary policy stance and markets became more optimistic about a US–China trade deal, but they remain slightly more restrictive than in the fall.

Communities in Action
Communities in Action

Author: National Academies of Sciences, Engineering, and Medicine

Publisher: National Academies Press

Published: 2017-04-27

Total Pages: 583

ISBN-13: 0309452961

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In the United States, some populations suffer from far greater disparities in health than others. Those disparities are caused not only by fundamental differences in health status across segments of the population, but also because of inequities in factors that impact health status, so-called determinants of health. Only part of an individual's health status depends on his or her behavior and choice; community-wide problems like poverty, unemployment, poor education, inadequate housing, poor public transportation, interpersonal violence, and decaying neighborhoods also contribute to health inequities, as well as the historic and ongoing interplay of structures, policies, and norms that shape lives. When these factors are not optimal in a community, it does not mean they are intractable: such inequities can be mitigated by social policies that can shape health in powerful ways. Communities in Action: Pathways to Health Equity seeks to delineate the causes of and the solutions to health inequities in the United States. This report focuses on what communities can do to promote health equity, what actions are needed by the many and varied stakeholders that are part of communities or support them, as well as the root causes and structural barriers that need to be overcome.

Policy Advice to Asia in the COVID-19 Era
Policy Advice to Asia in the COVID-19 Era

Author: Changyong Rhee

Publisher: International Monetary Fund

Published: 2021-03-05

Total Pages: 105

ISBN-13: 1513566598

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The Asia-Pacific region was the first to be hit by the COVID-19 pandemic; it put a strain on its people and economies, and policymaking became exceptionally difficult. This departmental paper contains the assessment of the key challenges facing Asia at this critical juncture and policy advice to the region both to address the current challenges and to build the foundations for a more sustainable and inclusive future. The paper focuses on (1) adjusting to the COVID-19 shock, (2) using unconventional policies when policy space is limited, (3) dealing with debt, and (4) helping the vulnerable and greening the recovery. The paper first presents the different ways countries are adjusting to the COVID-19 shock.