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  5. Disentangling Covid-19, Economic Mobility, and Containment Policy Shocks

Disentangling Covid-19, Economic Mobility, and Containment Policy Shocks

Abstract

We study the dynamic interaction between Covid-19, economic mobility, and containment policy. We use Bayesian panel structural vector autoregressions with daily data for 44 countries, identified through traditional and narrative sign restrictions. We find that incidence shocks and containment shocks have large and persistent effects on mobility, morbidity, and mortality that last for 1–2 months. These shocks are the main drivers of the pandemic, explaining between 20–60% of the average and historical variability in mobility, cases, and deaths worldwide. The policy tradeoff associated to non-pharmaceutical interventions is 1pp less economic mobility per day for 8% fewer deaths after three months.

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