A new paper published in the Journal of Population Economics shows that social networks help explain not only the spread of the disease, but also cross-country spillovers in perceptions about Coronavirus risk and in social distancing behavior.
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COVID-19 outbreak, social response, and early economic effects: a global VAR analysis of cross-country interdependencies
GLO Fellow Fabio Milani
Journal of Population Economics (2020), published ONLINE FIRST. PDF free accessible.
GLO Discussion Paper No. 626, 2020
Author Abstract: This paper studies the social and economic responses to the COVID-19 pandemic in a large sample of countries. I stress, in particular, the importance of countries’ interconnections to understand the spread of the virus. I estimate a global VAR model and exploit a dataset on existing social connections across country borders. I show that social networks help explain not only the spread of the disease but also cross-country spillovers in perceptions about coronavirus risk and in social distancing behavior. In the early phases of the pandemic, perceptions of coronavirus risk in most countries are affected by pandemic shocks originating in Italy. Later, the USA, Spain, and the UK play sizable roles. Social distancing responses to domestic and global health shocks are heterogeneous; however, they almost always exhibit delays and sluggish adjustments. Unemployment responses vary widely across countries. Unemployment is particularly responsive to health shocks in the USA and Spain, while unemployment fluctuations are attenuated almost everywhere else.
Access to the newly published complete Volume 33, Issue 4, October 2020.
LEAD ARTICLE OF ISSUE 4:
Yun Qiu, Xi Chen & Wei Shi, Impacts of social and economic factors on the transmission of coronavirus disease 2019 (COVID-19) in China
Journal of Population Economics 33, 1127–1172 (2020). OPEN ACCESS