International Evidence on Vaccines and the Mortality to Infections Ratio in the Pre-Omicron Era.

Prior to the appearance of the Omicron variant, observations on countries like the UK that have accumulated a large fraction of inoculated individuals suggest that, although initially, vaccines have little effect on new infections, they strongly reduce the share of mortality out of a given pool of infections. This paper examines the extent to which this phenomenon is more general by testing the hypothesis that the ratio of lagged mortality to current infections is decreasing in the total number of vaccines per one hundred individuals in the pre-Omicron period, in a pooled time-series, cross-section sample with weekly observations for up to 208 countries. The main finding is that vaccines moderate the share of mortality from a given pool of lagged infections at sufficiently high levels of vaccination rates, which is essentially a favorable shift in the tradeoff between life preservation and economic performance. The practical lesson is that, in the presence of a sufficiently high share of inoculated individuals, governments can shade down containment measures, even as infections are still rampant, without significant adverse effects on mortality.

Fiscal capacity and commercial bank lending under COVID-19.

We investigate the implications of government indebtedness for the efficacy of expansionary government spending in encouraging commercial bank lending growth during the COVID-19 pandemic. Our sample is a large cross-section of over 3000 banks from 71 countries. To address the likely endogeneity of government assistance, we instrument for extra-normal spending using disparities in pre-existing national political characteristics. Our results indicate that bank lending did respond to fiscal capacity, as higher public debt going into the crisis weakened the expansionary effects of higher spending on bank lending at economically and statistically significant levels. Moreover, this sensitivity was higher among weaker banks, suggesting sensitivity to the perceived implications of spending for government assistance going forward. We also found greater sensitivity in high-income economies and for small and medium-sized banks. Our results are robust to a variety of robustness tests, including perturbations in specification, sample, and estimation methodology.

Gaps between official and excess Covid-19 mortality measures: The effects of institutional quality and vaccinations.

We evaluate quartile rankings of countries during the Covid-19 pandemic using both official (confirmed) and excess mortality data. By December 2021, the quartile rankings of three-fifths of the countries differ when ranked by excess vs. official mortality. Countries that are 'doing substantially better' in the excess mortality are characterized by higher urban population shares; higher GDP/Capita; and higher scores on institutional and policy variables. We perform two regressions in which the ratio of Cumulative Excess to Official Covid-19 mortalities (E/O ratio) is regressed on covariates. In a narrow study, controlling for GDP/Capita and vaccination rates, by December 2021 the E/O ratio was smaller in countries with higher vaccination rates. In a broad study, adding institutional and policy variables, the E/O ratio was smaller in countries with higher degree of voice and accountability. The arrival of vaccines in 2021 and voice and accountability had a discernible association on the E/O ratio.

Pandemics and Economic Growth: Evidence from the 1968 H3N2 Influenza.

We evaluate the 1968 H3N2 Flu pandemic's economic cost in a cross-section of 52 countries. Using excess mortality rates as a proxy for the country-specific severity of the pandemic, we find that the average mortality rate (0.0062% per pandemic wave) was associated with a decline in output of 2.4% over the two pandemic waves. Our estimates also suggest the losses in consumption (-1.9%), investment (-1.2%), and productivity (-1.9%) over the two pandemic waves. The results are robust across regressions using alternative measures of mortality and output loss. The study adds to the current literature new empirical evidence on the economic consequences of the past pandemics in light of the potential impacts of the Covid-19 pandemic on productivity.

Emerging markets sovereign CDS spreads during COVID-19: Economics versus epidemiology news.

Can bad news about COVID-19 induce negative expectations on sovereign credit risks? We investigate the factors driving credit default swap (CDS) spreads of emerging market sovereigns around the outbreak of COVID-19. Using 2014-2019 data, we estimate a two-factor model of global and regional risks and then extrapolate the model-implied spreads for the period July 2019-June 2020. Intriguingly, the model initially predicts the realized spreads well but loses predictive accuracy during the COVID-19 pandemic. Fiscal space and oil-revenue dependence primarily drive the differences between the realized and predicted sovereign spreads. Our augmented-factor model indicates that the cumulative COVID-19 mortality rate growth is positively associated with the CDS spreads. The evidence suggests that the epidemiological deterioration can lower confidence in the sovereign credit markets due to the prospects of prolonged lockdowns and a slower GDP growth recovery. Our results also hold for a single regression of daily spread changes during 2014-2020.

Accounting for Global COVID-19 Diffusion Patterns, January-April 2020.

Key factors in modeling a pandemic and guiding policy-making include mortality rates associated with infections; the ability of government policies, medical systems, and society to adapt to the changing dynamics of a pandemic; and institutional and demographic characteristics affecting citizens' perceptions and behavioral responses to stringent policies. This paper traces the cross-country associations between COVID-19 mortality, policy interventions aimed at limiting social contact, and their interactions with institutional and demographic characteristics. We document that, with a lag, more stringent pandemic policies were associated with lower mortality growth rates. The association between stricter pandemic policies and lower future mortality growth is more pronounced in countries with a greater proportion of the elderly population and urban population, greater democratic freedoms, and larger international travel flows. Countries with greater policy stringency in place prior to the first death realized lower peak mortality rates and exhibited lower durations to the first mortality peak. In contrast, countries with higher initial mobility saw higher peak mortality rates in the first phase of the pandemic, and countries with a larger elderly population, a greater share of employees in vulnerable occupations, and a higher level of democracy took longer to reach their peak mortalities. Our results suggest that policy interventions are effective at slowing the geometric pattern of mortality growth, reducing the peak mortality, and shortening the duration to the first peak. We also shed light on the importance of institutional and demographic characteristics in guiding policy-making for future waves of the pandemic.