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Economic Policy Responses to COVID-19 of the Northeast Asia Countries

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  • Dmitriy Aleksandrovich Izotov

    (Economic Research Institute FEB RAS)

Abstract

Once at the epicenter of the original source of the coronavirus spread, the governments of China, the Republic of Korea and Japan introduced immediate administrative measures to isolate the population, which helped to effectively contain the spread of COVID-19 on their territory. The review shows that in the first half of 2020, due to policy of isolation in these Northeast Asia countries, there was a contraction of their economies. The subsequent dynamics of economic growth of the three Northeast Asia countries indicated structural differences in their economies. In the face of economic recession during a COVID-19 pandemic, the governments of Northeast Asia countries are applying stimulating economic policies, with Japan having the largest public spending with respect to its GDP, followed by the Republic of Korea and China. In China, the support for the economy is focused on fiscal policy measures, in the Republic of Korea – monetary and macro-financial policies, in Japan – a combination of policies’ various measures. In the context of a decrease in the coronavirus spread, mid-term estimates indicate that these three countries will be able to maintain positive economic growth rates while investment supporting of the green and digital technologies, including the support through the measures of economic policy. These support measures could have a short- and medium-term positive impact on the economies of the three Northeast Asia countries. However, for the purpose to localizing the pandemic in these countries large fiscal expenditures will contribute to the further growth of their public debt, thereby reducing the national savings rate, restraining the dynamics of their economic growth in the long term

Suggested Citation

  • Dmitriy Aleksandrovich Izotov, 2021. "Economic Policy Responses to COVID-19 of the Northeast Asia Countries," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 3, pages 156-178.
  • Handle: RePEc:far:spaeco:y:2021:i:3:p:156-178
    DOI: https://dx.doi.org/10.14530/se.2021.3.156-178
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    References listed on IDEAS

    as
    1. World Bank, 2020. "The COVID-19 Pandemic [Pandémie De Covid-19]," World Bank Publications - Reports 33696, The World Bank Group.
    2. Pavel Aleksandrovich Minakir, 2020. "Pandemic Economy: The Russian Way," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 2, pages 7-18.
    3. Byeongho Lim & Emma Kyoungseo Hong & Jinjin Mou & Inkyo Cheong, 2021. "COVID-19 in Korea: Success Based on Past Failure," Asian Economic Papers, MIT Press, vol. 20(2), pages 41-62, Summer.
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    More about this item

    Keywords

    economic growth; coronavirus; pandemic; COVID-19; government spending; economic policy measures; forecast; Northeast Asia; China; Republic of Korea; Japan;
    All these keywords.

    JEL classification:

    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • I00 - Health, Education, and Welfare - - General - - - General
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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