The novel coronavirus (COVID-19) is challenging the world. With no vaccine and limited medical capacity to treat the disease, nonpharmaceutical interventions (NPI) are the main strategy to contain ...

Pandemics, tourism and global change: a rapid assessment of COVID-19

The outbreak of coronavirus named COVID-19 has disrupted the Chinese economy and is spreading globally. The evolution of the disease and its economic impact is highly uncertain which makes it difficult for policymakers to formulate an appropriate macroeconomic policy response. In order to better understand possible economic outcomes, this paper explores seven different scenarios of how COVID-19 might evolve in the coming year using a modelling technique developed by Lee and McKibbin (2003) and extended by McKibbin and Sidorenko (2006). It examines the impacts of different scenarios on macroeconomic outcomes and financial markets in a global hybrid DSGE/CGE general equilibrium model. The scenarios in this paper demonstrate that even a contained outbreak could significantly impact the global economy in the short run. These scenarios demonstrate the scale of costs that might be avoided by greater investment in public health systems in all economies but particularly in less developed economies where health care systems are less developed and popultion density is high.

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The economic impact of COVID-19

This report discusses the economic impact of the Coronavirus/COVID-19 crisis across industries, and countries. It also provides estimates of the potential global economic costs of COVID-19, and the GDP growth of different countries. 

The current draft includes estimates for 30 countries, under different scenarios.

The report shows the economic effects of outbreak are currently being underestimated, due to over-reliance on historical comparisons with SARS, or the 2008/2009 financial crisis. 

At the date of this report, the duration of the lockdown, as well as how the recovery will take place is still unknown. That is why several scenarios are used. In a mild scenario, GDP growth would take a hit, ranging from 3-6% depending on the country. As a result, in the sample of 30 countries covered, we would see a median decline in GDP in 2020 of -2.8%. In other scenarios, GDP can fall more than 10%, and in some countries, more than 15%.

Service-oriented economies will be particularly negatively affected, and have more jobs at risk. Countries like Greece, Portugal, and Spain that are more reliant on tourism (more than 15% of GDP) will be more affected by this crisis. This current crisis is generating spillover effects throughout supply chains. Therefore, countries highly dependent on foreign trade are more negatively affected. The results suggest that on average, each additional month of crisis costs 2.5-3% of global GDP.

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Economic Effects of Coronavirus Outbreak (COVID-19) on the World Economy

Disease outbreaks and pandemics have long played a role in societal and economic change. However, the nature of such change is selective, meaning that it is sometimes minimal and, at other times, and change or transformation may be unexpected, potentially even reinforcing contemporary paradigms. A comprehensive overview of pandemics and their effects is provided. This is used to help contextualise the COVID-19 pandemic, its impact on tourism and government, industry and consumer response. Drawing on the available literature, factors that will affect tourism and destination recovery are then identified. Some measures will continue or even expand present growth orientations in tourism while others may contribute to sustainability. It is concluded that that the selective nature of the effects of COVID-19 and the measures to contain it may lead to reorientation of tourism in some cases, but in others will contribute to policies reflecting the selfish nationalism of some countries. However, the response to planetary limits and sustainable tourism requires a global approach. Despite clear evidence of this necessity, the possibility for a comprehensive transformation of the tourism system remains extremely limited without a fundamental transformation of the entire planet.

Pandemics, transformations and tourism: be careful what you wish for

This paper evaluates the short-term impact of the coronavirus outbreak on 21 leading stock market indices in major affected countries including Japan, Korea, Singapore, the USA, Germany, Italy, and the UK etc. The consequences of infectious disease are considerable and have been directly affecting stock markets worldwide. Using an event study method, our results indicate that the stock markets in major affected countries and areas fell quickly after the virus outbreak. Countries in Asia experienced more negative abnormal returns as compared to other countries. Further panel fixed effect regressions also support the adverse effect of COVID-19 confirmed cases on stock indices abnormal returns through an effective channel by adding up investors' pessimistic sentiment on future returns and fears of uncertainties.

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The COVID-19 Outbreak and Affected Countries Stock Markets Response.

SARS is the first deadly infectious disease of the 21st century. It started in the Chinese province of Guangdong in November 2002, and by August 2003, it had spread to 29 countries and 3 regions, with a cumulative total of 8,422 cases and 916 deaths. This paper describes the spread of the disease in Hong Kong and discusses its impact on the economy. SARS was an unexpected negative shock. The most significant negative effects were on the demand side, with local consumption and the export of services related to tourism and air travel severely affected in the short run. The economy did not experience a supply shock, as the manufacturing base in the Pearl River Delta was unaffected, and goods continued to be exported through Hong Kong normally. Initial alarmist reports and estimates about the negative economic impacts were not borne out. Fear and panic subsided quickly once the outbreak was under control, and the economy rebounded rapidly.

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Y. C. Richard Wong

Papers

Economic Impact of SARS: The Case of Hong Kong*