How Well Can Real-Time Indicators Track the Economic Impacts of a Crisis Like COVID-19 ?

This paper presents evidence on the extent to which a set of real-time indicators trackedchanges in gross domestic product across 142 countries in 2020. The real-time indicators include Google mobility,Google search trends, food price information, nitrogen dioxide, and nighttime lights. Google mobility and staplefood prices both declined sharply in March and April, followed by a rapid recovery that returned to baselinelevels by July and August. Mobility and staple food prices fell less in low-income countries. Nitrogen dioxide levelsshow a similar pattern, with a steep fall and rapid recovery in high-income and upper-middle-income countries but not inlow-income and lower-middle-income countries. In April and May, Google search terms reflecting economic distress andreligiosity spiked in some regions but not others. Data on nighttime lights show no clear drop in March outside EastAsia. Linear models selected using the Least Absolute Shrinkage and Selection Operator explain about a third ofthe variation in annual gross domestic product growth rates across 72 countries. In a smaller subset of higher incomecountries, real-time indicators explain about 40 percent of the variation in quarterly gross domestic product growth.Overall, mobility and food price data, as well as pollution data in more developed countries, appeared to be best atcapturing the widespread economic disruption experienced during the summer of 2020. The results indicate that thesereal-time indicators can track a substantial percentage of both annual and quarterly changes in gross domestic product.