Measuring real activity using a weekly economic index(1)

This paper describes a weekly economic index (WEI) developed to track the rapid economic developments associated with the onset of and policy response to the novel coronavirus in the United States. The WEI is a weekly composite index of real economic activity, with eight of 10 series available the Thursday after the end of the reference week. In addition to being a weekly real activity index, the WEI has strong predictive power for output measures and provided an accurate nowcast of current-quarter GDP growth in the first half of 2020, with weaker performance in the second half. We document how the WEI responded to key events and data releases during the first 10 months of the pandemic.

U.S. economic activity during the early weeks of the SARS-COV-2 outbreak

This paper describes a weekly economic index (WEI) developed to track the rapid economic developments associated with the response to the novel Coronavirus in the United States. The WEI shows a strong and sudden decline in economic activity starting in the week ending March 21, 2020. In the most recent week ending March 28, the WEI indicates economic activity has fallen further to -6.19% scaled to 4 quarter growth in GDP.

Data gaps and the policy response to the novel coronavirus

This note lays out the basic Susceptible-Infected-Recovered (SIR) epidemiological model of contagion, with a target audience of economists who want a framework for understanding the effects of social distancing and containment policies on the evolution of contagion and interactions with the economy. A key parameter, the asymptomatic rate (the fraction of the infected that are not tested under current guidelines), is not well estimated in the literature because tests for the coronavirus have been targeted at the sick and vulnerable, however it could be estimated by random sampling of the population. In this simple model, different policies that yield the same transmission rate beta have the same health outcomes but can have very different economic costs. Thus, one way to frame the economics of shutdown policy is as finding the most efficient policies to achieve a given beta, then determining the path of beta that trades off the economic cost against the cost of excess lives lost by overwhelming the health care system.

Policies for a second wave

In the spring of 2020, the initial surge of COVID-19 infections and deaths was flattened using a combination of economic shutdowns and noneconomic non-pharmaceutical interventions (NPIs). The possibility of a second wave of infections and deaths raises the question of what interventions can be used to significantly reduce deaths while supporting, not preventing, economic recovery. We use a five-age epidemiological model combined with sixty-six-sector economic accounting to examine policies to avert and to respond to a second wave. We find that a second round of economic shutdowns alone are neither sufficient nor necessary to avert or quell a second wave. In contrast, noneconomic NPIs, such as wearing masks and personal distancing, increasing testing and quarantine, reintroducing restrictions on social and recreational gatherings, and enhancing protections for the elderly together can mitigate a second wave while leaving room for an economic recovery. © 2020, Brookings Institution Press. All rights reserved.