The effect of COVID-19 restrictions (lockdown) on GDP growth in CIS countries
Abstract
Relevance. Global economy has suffered significant economic consequences as a result of the COVID-19. The impact of the pandemic crisis had generally been felt around the world. However, developing economies, with their many institutional constraints, have been much more affected by the crisis. This prompted governments to devise stringent policies to limit its destructiveness, with the goal of saving the populace while minimizing economic damage.
Research objective. We investigate the effect of government's stringent policies on economic growth and the influence of stringent policies and inflation on economic growth in CIS's countries.
Data and methods. Our analysis is conducted using quantile regression, which is an extension of the Johnson-Neumann interval OLS, and a simple slope analysis for the period from 1 March 2020 to 17 September 2021.
Results. Our findings show that the government's stringent policies have a negative effect on economy, reducing GDP growth by 4.9% in the mean model. Excessively stringent policies have a negative impact on the economy and the consequent decline in living conditions.
Conclusions. The findings of this study reveal that policymakers should take a targeted approach to COVID policies, considering the varying effects of stringency across different levels of economic growth and taking into account the potential interaction with inflation rates. By implementing policies that balance the need for public health and economic growth, policymakers can mitigate the negative impacts of COVID restrictions on the economy and minimize the risk of stagnation traps.
Keywords
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DOI: https://doi.org/10.15826/recon.2023.9.4.026
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