Time-varying impact of pandemics on global output growth

Rangan Gupta; Xin Sheng; Mehmet Balcilar; Qiang Ji

doi:10.1016/j.frl.2020.101823

Time-varying impact of pandemics on global output growth

Financ Res Lett. 2021 Jul:41:101823. doi: 10.1016/j.frl.2020.101823. Epub 2020 Oct 29.

Authors

Rangan Gupta¹, Xin Sheng², Mehmet Balcilar³, Qiang Ji^{4

5}

Affiliations

¹ Department of Economics, University of Pretoria, Pretoria, 0002, South Africa.
² Lord Ashcroft International Business School, Anglia Ruskin University, Chelmsford, CM1 1SQ, United Kingdom.
³ Department of Economics, Eastern Mediterranean University, Famagusta, via Mersin 10, Northern Cyprus, Turkey.
⁴ Institutes of Science and Development, Chinese Academy of Sciences, Beijing 100190, China.
⁵ School of Public Policy and Management, University of Chinese Academy of Sciences, Beijing 100049, China.

Abstract

This paper analyses the dynamic impact of uncertainty due to global pandemics (SARS, H5N1, H1N1, MERS, Ebola, and COVID-19) on global output growth, using a TVP-SVAR model. We find that the negative effect of the coronavirus on the growth rate of output is unprecedented, with the emerging markets being the worst hit. We also find that since 2016, the comovement among the growth rates has increased significantly. Our results imply that policymakers would need to undertake massive expansionary policies, but it is also important to pursue well-coordinated policy decisions across the economic blocs.

Keywords: Output growth; Pandemics; TVP-SVAR; Uncertainty.