Anders Akerman, University of Stavanger. "Economic effects of the COVID-19 pandemic and fast vs efficient policy in Sweden"
Department seminar. Anders Akerman is an Associate Professor at the University of Stavanger Business School. He will present the paper "Economic effects of the COVID-19 pandemic and fast vs efficient policy in Sweden" (joint with Karolina Ekholm, Torsten Persson, and Oskar N. Skans).
Source: University of Stavanger
We explore the economic impact of Covid-19 on the Swedish economy, with a particular focus on the first two waves in 2020. We show a sharp intial drop in economic activity, but that most of the economy had recovered by the end of the year. We use novel high-frequency data to estimate transmission effects from both foreign and domestic rates of Covid-19. Regarding domestic Covid-19, we show that variation in local spread of the virus mattered, which means that the behavioral response of the population played an important role, in addition to variation in national guidelines. We find substantial heterogeneity in effects, across workers, industries and firms. We therefore also analyze the allocation and efficiency of support to firms. We find substantial economic volatility in economic performance across firms. Volatility at the firm-level is high also during normal years, however, which makes such shocks a noisy signal. Much support, but not all, was allocated to struggling firms and to industries that performed worse than during normal years. We also evaluate whether real-time microdata may be used to design policy, and find that early signals in 2020 were good predictors for the outcomes by the end of the year.