Tracking GDP in real-time using electricity market data: Insights from the first wave of COVID-19 across Europe

Abstract

This paper develops a methodology for tracking in real-time the impact of shocks (such as natural disasters, financial crises or pandemics) on gross domestic product (GDP) by analyzing high-frequency electricity market data. As an illustration, we estimate the GDP loss caused by COVID-19 in twelve European countries during the first wave of the pandemic. Our results are almost indistinguishable from the official statistics during the first two quarters of 2020 (the correlation coefficient is 0.98) and are validated by several robustness tests. However, they are also more chronologically disaggregated and up-to-date than standard macroeconomic indicators and, therefore, can provide crucial and timely information for policy evaluation in time of crisis. Our results show that pursuing “herd immunity” did not shelter from the harmful economic impacts of the first wave of the pandemic. They also suggest that coordinating policies internationally is fundamental for minimizing spillover effects from non-pharmaceutical interventions across countries.

Untangling the changing impact of non-pharmaceutical interventions and vaccination on European COVID-19 trajectories

“…Since the emergence of coronavirus disease 2019 (COVID-19) and global transmission from early 2020, governments worldwide have implemented a series of non-pharmaceutical interventions (NPIs), to varying extents, in an effort to reduce local transmission of severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) 1 . The impact of these NPI strategies has been well documented 2 – 4 , yet the consequences of long-term social restrictions have raised concerns about the potential for economic recession 5 and unintended adverse mental-health outcomes 6 . COVID-19 vaccines, which protect against infections and severe illness, provide the potential for relaxing NPIs and addressing associated economic and social burdens.…”

Public Compliance Matters in Evidence-Based Public Health Policy: Evidence from Evaluating Social Distancing in the First Wave of COVID-19

“…Our investigation may provide insight into the possibility of coordinating public health policy at the country level globally. Introducing policy interventions with an appropriate magnitude as early as possible was suggested to decrease the spillover effects of cross-national, poorly coordinated responses [ 66 ]. Though COVID-19 spillover has been partially predicted, its worldwide consequences and social costs remain to be assessed [ 67 , 68 ].…”

Future assessment of the impact of the COVID-19 pandemic on the electricity market based on a stochastic socioeconomic model

“…Regarding seasonality indexes, it was initially assumed that they were equal prior and following the pandemic. However, as demonstrated by Fezzi et al [107] , the containment policies might significantly influence seasonality. Therefore, the third consideration to be varied is to assume distinct seasonalities.…”