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Impact of Coronavirus Pandemic on the Global Economy: Demand and Supply Shocks

Author

Listed:
  • Chinenye Ifeoma Nwokolo

    (University of Lagos)

  • Matthew Ikechukwu Ogbuagu

    (Federal University Oye-Ekiti)

  • Onyebuchi Iwegbu

    (University of Lagos)

Abstract

This paper examines the dynamic effects of coronavirus pandemic on the global economy by pitching its searchlights on the demand and supply shocks. The study employed Vector Autoregression (VAR) technique and Granger causality test; the Granger causality test revealed that COVID-19 pandemic does not trigger change in regional stock markets and commodity prices within these regions; except for the price of natural gas which changed as a result of the COVID19 pandemic in Europe. Besides the EURONEXT market in Eastern Mediterranean region, the impulse response shows that other regional stock markets responded positively to shocks in daily report of COVID-19 confirmed cases. The study concludes that within the study period, the HSBC’s stock index was the worst-hit. Economies must embrace aggressive efforts at developing COVID19 vaccine as well as coordinated policy measures at increasing the stock market pause above 15 minutes whenever stock prices fall below the lower bound threshold.

Suggested Citation

  • Chinenye Ifeoma Nwokolo & Matthew Ikechukwu Ogbuagu & Onyebuchi Iwegbu, 2020. "Impact of Coronavirus Pandemic on the Global Economy: Demand and Supply Shocks," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 50-60, August.
    • Handle: RePEc:ovi:oviste:v:xx:y:2020:i:1:p:50-60
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    File URL: http://stec.univ-ovidius.ro/html/anale/RO/2020/Section%201/7.pdf
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    References listed on IDEAS

    as
    1. Luca Fornaro & Martin Wolf, 2020. "Covid-19 coronavirus and macroeconomic policy," Economics Working Papers 1713, Department of Economics and Business, Universitat Pompeu Fabra.
    2. John E. Ataguba, 2020. "COVID-19 Pandemic, a War to be Won: Understanding its Economic Implications for Africa," Applied Health Economics and Health Policy, Springer, vol. 18(3), pages 325-328, June.
    3. Faria-e-Castro, Miguel, 2021. "Fiscal policy during a pandemic," Journal of Economic Dynamics and Control, Elsevier, vol. 125(C).
    4. Lembke B., 1918. "√ a. p," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 111(1), pages 709-712, February.
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    Cited by:

    1. Anasuya Haldar & Narayan Sethi, 2022. "The Economic Effects Of Covid-19 Mitigation Policies On Unemployment And Economic Policy Uncertainty," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 25(Special I), pages 61-84, March.
    2. Lukman O. Oyelami & Matthew I. Ogbuagu & Olufemi M. Saibu, 2022. "Dynamic Interaction of COVID-19 Incidence and Stock Market Performance: Evidence from Nigeria," Annals of Data Science, Springer, vol. 9(5), pages 1009-1023, October.

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    More about this item

    Keywords

    Coronavirus Pandemic; Global Economic; Demand and Supply Shock;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)

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