COVID-19 social distancing measures and economic growth: Distinguishing short- and long-term effects

Badar Nadeem Ashraf; John W Goodell

doi:10.1016/j.frl.2021.102639

COVID-19 social distancing measures and economic growth: Distinguishing short- and long-term effects

Financ Res Lett. 2022 Jun:47:102639. doi: 10.1016/j.frl.2021.102639. Epub 2021 Dec 21.

Authors

Badar Nadeem Ashraf¹, John W Goodell²

Affiliations

¹ School of Finance, Jiangxi University of Finance and Economics, Nanchang 330013, China.
² College of Business, The University of Akron, Akron, OH 44325, USA.

Abstract

Social distancing policies have been criticized for their adverse effect on economies. However, we evidence that while they have a short-run adverse effect, they also have a long-run recovery effect on economic growth. Utilizing quarterly gross domestic product (GDP) growth rate data from OECD member states, we find that the medium-term recovery effect of stringent social distancing policies on economic growth is three times higher the short-term adverse effect. We additionally investigate social distancing measures with sub-components of GDP, as well as the conditioning roles of institutional factors.

Keywords: COVID-19; GDP growth; Pandemic; Social distancing polices.