The Effect of Covid-19 on Economic Growth: Cross-Country Determinants
|Author:||Bc. Matyáš Juřena|
|Year:||2020 - summer|
|Leaders:|| doc. PhDr. Tomáš Havránek Ph.D.
|Work type:|| Bachelors
|Awards and prizes:|
|Abstract:||Not only does the COVID-19 pandemic threaten the health of millions of people
worldwide, it has also thrown the global economy into a recession. Moreover,
differences in the expected decline of countries’ economic output exist. Thus, the
objective of this thesis is to identify the cross-country determinants of the economic
downturn caused by the pandemic. An extensive dataset of 34 explanatory variables
describing the characteristics of 145 countries is analyzed. To address the inherent
model uncertainty present in the cross-country analysis of such magnitude, we apply
the econometric method of Bayesian Model Averaging (BMA). Consequently, we have
identified the best regression model, which includes five explanatory variables with
reasonable interpretations. To our knowledge, this thesis is the first work studying the
cross-country differences in the output decline caused by the coronavirus pandemic.
However, a more detailed analysis of the effects of policy measures on the duration of
a recession and the speed and size of the expected future recovery is suggested, once
data is available.