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The heterogeneous economic impact of the pandemic across euro area countries

Author

Listed:
  • Muggenthaler, Philip
  • Schroth, Joachim
  • Sun, Yiqiao

Abstract

This box reports evidence on the heterogeneous impact of the pandemic on euro area countries. It shows that the different impact on activity was largely due to different containment measures, heterogenous sectoral compositions and institutions. Economies with a larger share of high-contact services sectors were hit the hardest, even when lockdown measures eased over time. All euro area governments implemented fiscal support measures, albeit different in size, to alleviate the health and economic consequences of the pandemic. This led to divergence in public finances in 2020 compared with the pre-crisis period. Looking ahead, the Next Generation EU programme is expected to help reduce the economic divergence observed in the euro area in 2020 and foster a more inclusive recovery. JEL Classification: E6, E21, E32

Suggested Citation

  • Muggenthaler, Philip & Schroth, Joachim & Sun, Yiqiao, 2021. "The heterogeneous economic impact of the pandemic across euro area countries," Economic Bulletin Boxes, European Central Bank, vol. 5.
    • Handle: RePEc:ecb:ecbbox:2021:0005:3
    Note: 3510124
    as

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    File URL: https://www.ecb.europa.eu//pub/economic-bulletin/focus/2021/html/ecb.ebbox202105_03~267ada0d38.en.html
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    Citations

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    Cited by:

    1. Radu GHEORGHE, 2021. "Heterogeneous Socio-Economic Effects Of Covid-19. Socio-Economic Impact Of The Pandemic Crisis In Romania," Internal Auditing and Risk Management, Athenaeum University of Bucharest, vol. 63(3), pages 25-37, September.
    2. Silva, Thiago Christiano & de Souza, Sergio Rubens Stancato & Guerra, Solange Maria & Tabak, Benjamin Miranda, 2023. "COVID-19 and bank branch lending: The moderating effect of digitalization," Journal of Banking & Finance, Elsevier, vol. 152(C).
    3. Pierre Rostan & Alexandra Rostan, 2024. "How Australia's economy gained momentum because of Covid‐19," Australian Economic Papers, Wiley Blackwell, vol. 63(1), pages 36-58, March.
    4. Dimitris Korobilis & Maximilian Schröder, 2023. "Monitoring multicountry macroeconomic risk," Working Paper 2023/9, Norges Bank.
    5. Martín Fuentes, Natalia & Born, Alexandra & Bremus, Franziska & Kastelein, Wieger & Lambert, Claudia, 2023. "A deep dive into the capital channel of risk sharing in the euro area," Working Paper Series 2864, European Central Bank.
    6. Thiago Christiano Silva & Sergio Rubens Stancato de Souza & Solange Maria Guerra, 2021. "COVID-19 and Local Market Power in Credit Markets," Working Papers Series 558, Central Bank of Brazil, Research Department.
    7. Thiago Christiano Silva & Sergio Rubens Stancato de Souza & Solange Maria Guerra, 2022. "Covid-19 and market power in local credit markets: the role of digitalization," BIS Working Papers 1017, Bank for International Settlements.
    8. Josef Abrhám & Milan Vošta, 2022. "Impact of the COVID-19 Pandemic on EU Convergence," JRFM, MDPI, vol. 15(9), pages 1-14, August.
    9. Kunovac, Davor & Palenzuela, Diego Rodriguez & Sun, Yiqiao, 2022. "A new optimum currency area index for the euro area," Working Paper Series 2730, European Central Bank.

    More about this item

    Keywords

    country heterogeneity; COVID-19; fiscal measures;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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