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Long COVID? Prospects for economic scarring from the pandemic

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  • Philip Barrett
  • Sonali Das
  • Giacomo Magistretti
  • Evgenia Pugacheva
  • Philippe Wingender

Abstract

This paper examines the potential persistent effects (scarring) of the COVID‐19 pandemic on the economy and the channels through which they may occur. Our findings from a broad set of historical recessions confirm that recessions are associated with persistent output losses and that the greatest scarring has occurred following financial crises. The amount of scarring following pandemic and epidemic recessions in the sample is in between that of typical recessions and financial crises. Results on the channels show that the productivity channel is important, as all types of recessions have been followed by persistent losses to total factor productivity.

Suggested Citation

  • Philip Barrett & Sonali Das & Giacomo Magistretti & Evgenia Pugacheva & Philippe Wingender, 2023. "Long COVID? Prospects for economic scarring from the pandemic," Contemporary Economic Policy, Western Economic Association International, vol. 41(2), pages 227-242, April.
    • Handle: RePEc:bla:coecpo:v:41:y:2023:i:2:p:227-242
    DOI: 10.1111/coep.12598
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    2. Keyang Li & Yu Qin & Jing Wu & Jubo Yan, 2023. "Perceived economic prospects during the early stage of COVID‐19 breakout," Contemporary Economic Policy, Western Economic Association International, vol. 41(4), pages 696-713, October.
    3. Grijalva, Diego, 2023. "Women-led firms’ performance during the Covid-19 pandemic. Evidence from an emerging economy," MPRA Paper 117225, University Library of Munich, Germany.

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