Spillover of COVID-19: Impact on the Global Economy

Resource type
Report
Authors/contributors
Title
Spillover of COVID-19: Impact on the Global Economy
Abstract
How did a health crisis translate to an economic crisis? Why did the spread of the coronavirus bring the global economy to its knees? The answer lies in two methods by which coronavirus stifled economic activities. First, the spread of the virus encouraged social distancing which led to the shutdown of financial markets, corporate offices, businesses and events. Second, the exponential rate at which the virus was spreading, and the heightened uncertainty about how bad the situation could get, led to flight to safety in consumption and investment among consumers, investors and international trade partners. We focus on the period from the start of 2020 through March when the coronavirus began spreading into other countries and markets. We draw on real-world observations in assessing the restrictive measures, monetary policy measures, fiscal policy measures and the public health measures that were adopted during the period. We empirically examine the impact of social distancing policies on economic activities and stock market indices. The findings reveal that the increasing number of lockdown days, monetary policy decisions and international travel restrictions severely affected the level of economic activities and the closing, opening, lowest and highest stock price of major stock market indices. In contrast, the imposed restriction on internal movement and higher fiscal policy spending had a positive impact on the level of economic activities, although the increasing number of confirmed coronavirus cases did not have a significant effect on the level of economic activities.
Report Number
ID 3562570
Report Type
SSRN Scholarly Paper
Place
Rochester, NY
Institution
Social Science Research Network
Date
2020/03/27
Language
en
Short Title
Spillover of COVID-19
Accessed
12/08/2020, 16:51
Library Catalogue
Citation
Ozili, P. K., & Arun, T. (2020). Spillover of COVID-19: Impact on the Global Economy (SSRN Scholarly Paper ID 3562570). Social Science Research Network. https://doi.org/10.2139/ssrn.3562570
Theme