SKK GSB Professor Gokce Basbug publishes study on Economic Policy Responses to the COVID-19
- SKKGSB
- Hit17647
- 2021-01-19
Professor Gokce Basbug (SKK GSB), in collaboration with Ceyhun Elgin (Columbia University) and Abdullah Yalaman (Eskisehir Osmangazi University) has published cutting-edge research on the economic policy responses to the COVID-19 pandemic.
His article, “Economic Policy Responses to a Pandemic: Developing the Covid-19 Economic Stimulus Index” appeared in CEPR’s Covid Economics: Vetted and Real-Time Papers and has already gained wide media coverage from TIME, Washington Post, BBC, Forbes, VoxEU, and BBC Mundo.
The authors collected extensive data on the economic policy responses of 168 countries over the course of the pandemic since March 2020, including data on fiscal and monetary policy, and balance of payments/exchange rate measures.
Typical fiscal policies included transfers to households and businesses, extension of the labor market and social safety benefits, and funds for the healthcare system. South Korea, for example, introduced cash transfers for quarantined individuals, consumption coupons for low-income households, and wage and rent support for small businesses; Germany expanded access to short-term work subsidies, increased childcare benefits for low-income parents, and provided grants to small business owners and self-employed persons affected by the outbreak etc.
In addition, the study conducted a comparative analysis of measures across countries. The analysis showed that countries expected to experience a sharper decline in GDP in 2020 (according to the International Monetary Fund forecasts) adopted larger fiscal and macro-financial packages. In a similar vein, wealthier countries adopted larger policy packages. In comparison, countries with higher inflation rates in 2019 introduced lower policy rates and reserve requirement cuts, and adopted smaller macro-financial packages.
The data, which have been regularly updated, can be found here: http://web.boun.edu.tr/elgin/COVID.htm
Reference: Study Info
Economic Policy Responses to the COVID-19 Pandemic by GOKCE BASBUG (SKK Graduate School of Business, Sungkyunkwan University), CEYHUN ELGIN (Columbia University), ABDULLAH YALAMAN (Eskisehir Osmangazi University)
The coronavirus disease (COVID-19) outbreak has resulted in more than 65 million confirmed cases and caused 1.5 million deaths related to COVID-19 as of early December 2020. In addition to human suffering and loss of lives, the outbreak generated a major global economic downturn. To mitigate the negative effects of the pandemic on the economy, governments have adopted expansionary economic packages. In our study, we created an extensive database of 168 countries’ economic policy responses over the course of the pandemic, including fiscal, monetary, and balance of payments/exchange rate measures.
Typical fiscal policies include transfers to households and businesses, extension of the labor market and social safety benefits, and funds for the healthcare system. For example, South Korea introduced cash transfers for quarantined individuals, consumption coupons for low-income households, and wage and rent support for small businesses. Germany expanded access to short-term work subsidies, increased childcare benefits for low-income parents, and provided grants to small business owners and self-employed persons affected by the outbreak. The major conventional monetary policy tool used by central banks is the cuts in different types of policy rates. Central banks have also used several macro-prudential measures, such as cuts in reserve requirement ratios on different types of deposits. In our study, in addition to creating a dataset by coding economic policy responses, we provide a cross-country comparison of these measures.
Our analysis with the data show that countries that are expected to experience a sharper decline in GDP in the year of 2020 according to the International Monetary Fund forecasts have adopted larger fiscal and macro-financial packages. Moreover, richer countries have adopted larger policy packages. In addition, countries with a higher inflation rate in 2019 have implemented lower policy rates and reserve requirement cuts as well as adopted smaller macro-financial packages. For our project, we had started programming economic policy responses in March of 2020 and have been regularly updating the database since then. Our up-to-date data and academic paper as well as media coverage by major outlets can be found at our web page.