20220630-IMF-Output_Losses_in_Europe_During_COVID-19_What_Role_for_Policies_40页_1mb

The IMF working paper "Output Losses in Europe During COVID-19: What Role for Policies?" analyzes the factors contributing to differing economic impacts across European countries during the COVID-19 pandemic. The study finds significant heterogeneity in output losses, with emerging economies experiencing shallower recessions primarily due to higher underlying growth rates. The decline in mobility was the largest contributor to output losses, while sectoral composition had a limited role. Fiscal policies played a substantial, though likely underestimated, role in mitigating economic damage, with multipliers being larger in emerging economies due to higher informality, inequality, and the presence of IMF-supported programs. Advanced economies, despite more substantial policy support, had lower fiscal multipliers due to larger fiscal packages potentially diminishing effectiveness. Overall, policies contributed significantly more to output losses in advanced economies compared to emerging ones.