The economics of COVID-19 pandemic: A survey

Abstract

Through a survey of the literature on the economics of the coronavirus (COVID-19) pandemic, this study explores the effects of the pandemic and proposes potential policy directions to mitigate its effects. Our survey reveals that adverse economic effects have been observed due to the COVID-19 pandemic in addition to fatalities. Furthermore, the survey indicates the need for greater coordination at national and international levels. This study concludes by suggesting coordination among monetary, macroprudential, and fiscal policies (trio) to mitigate the adverse economic effects of COVID-19. Finally, this study explores potential directions for future research.

Keywords: COVID-19; Fiscal policy; Macroprudential policy; Monetary policy; Pandemics.

Fig. 1

Stock indices of most affected countries. This figure indicates the plots of stock indices of the most affected countries during the COVID-19. It covers stock indices for Argentina, Brazil, Colombia, India, Mexico, Peru, Russia, South Africa, Spain, and the USA. The blue line indicates the data period’s division into two such as pre and during the COVID-19 period. We can observe that the stock indices experience high volatility during the COVID-19 period. The period spans from January 1, 2019, to September 17, 2020. The stock data are collected from the CEIC Database. (For interpretation of the references to color in this figure legend, the reader is referred to the web version of this article.)

Fig. 1

Stock indices of most affected countries. This figure indicates the plots of stock indices of the most affected countries during the COVID-19. It covers stock indices for Argentina, Brazil, Colombia, India, Mexico, Peru, Russia, South Africa, Spain, and the USA. The blue line indicates the data period’s division into two such as pre and during the COVID-19 period. We can observe that the stock indices experience high volatility during the COVID-19 period. The period spans from January 1, 2019, to September 17, 2020. The stock data are collected from the CEIC Database. (For interpretation of the references to color in this figure legend, the reader is referred to the web version of this article.)

Fig. 2

Exchange rate of most affected countries. This figure indicates the plots of exchange rates of the most affected countries during the COVID-19. It covers stock indices for Argentina, Brazil, Colombia, India, Mexico, Peru, Russia, South Africa, Spain, and the USA. The period spans from January 1, 2019, to September 17, 2020. The exchange rate data are collected from the CEIC Database. The blue line indicates the data period’s division into two, such as the pre-COVID-19 and the COVID-19 period. The USA’s exchange rate is not considered as it is the benchmark currency for all other economies. We can observe that all the economies witness currency depreciation during the COVID-19 period. Most currencies witness depreciation till mid-April and show a slower improvement in the aftermath. However, the exchange rate of all economies witness high volatility except that of Argentina. Argentina indicates a steep increase in its exchange rate, implying continuous depreciation of the Argentinian Peso to the dollar in the COVID-19 period. In terms of recovery, all other economies’ currency is improving but far behind than the pre-COVID period. Surprisingly, Spain indicates tremendous appreciation after the mid-may period. (For interpretation of the references to color in this figure legend, the reader is referred to the web version of this article.)

Fig. 2

Exchange rate of most affected countries. This figure indicates the plots of exchange rates of the most affected countries during the COVID-19. It covers stock indices for Argentina, Brazil, Colombia, India, Mexico, Peru, Russia, South Africa, Spain, and the USA. The period spans from January 1, 2019, to September 17, 2020. The exchange rate data are collected from the CEIC Database. The blue line indicates the data period’s division into two, such as the pre-COVID-19 and the COVID-19 period. The USA’s exchange rate is not considered as it is the benchmark currency for all other economies. We can observe that all the economies witness currency depreciation during the COVID-19 period. Most currencies witness depreciation till mid-April and show a slower improvement in the aftermath. However, the exchange rate of all economies witness high volatility except that of Argentina. Argentina indicates a steep increase in its exchange rate, implying continuous depreciation of the Argentinian Peso to the dollar in the COVID-19 period. In terms of recovery, all other economies’ currency is improving but far behind than the pre-COVID period. Surprisingly, Spain indicates tremendous appreciation after the mid-may period. (For interpretation of the references to color in this figure legend, the reader is referred to the web version of this article.)

Fig. 3

Trends in oil prices. The figure plots the oil prices from January 2, 2019, to September 15, 2020. WTI stands for West Texas Intermediate. The daily oil price is based on the West Texas Intermediate and collected from the Energy Information Administration. The blue line indicates the division of the data period into two such as pre and COVID-19 periods. We can observe that the oil prices during the COVID-19 period are lesser than the pre-COVID-19 period. (For interpretation of the references to color in this figure legend, the reader is referred to the web version of this article.)