Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/338554 
Year of Publication: 
2023
Citation: 
[Journal:] European Economic Review [ISSN:] 1873-572X [Volume:] 158 [Article No.:] 104526 [Publisher:] Elsevier [Place:] Amsterdam [Year:] 2023 [Pages:] 1-15
Publisher: 
Elsevier, Amsterdam
Abstract: 
We construct a global index of epidemic news based on text analysis of newspapers from 17 countries. We apply the index to study the economic consequences of epidemics on the world economy in structural vector autoregressions. Epidemic shocks exert significantly and persistently negative effects on output and prices that last for up to two years. There is no quick recovery and no overshooting. The output losses are permanent. Country studies show that the direct effects are substantially larger than the indirect effects through trade and financial markets. Furthermore, the simultaneous fall of output and prices suggests that demand dominate supply contractions and that monetary and fiscal stimuli are appropriate crisis responses to minimize permanent output losses.
Subjects: 
Epidemics
pandemics
text analysis
structural vector autoregressions
Covid-19
world economy
JEL: 
C32
E62
H12
I18
Published Version’s DOI: 
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)

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