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Mr. Pragyan Deb, Davide Furceri, Mr. Jonathan David Ostry, and Nour Tawk

for the endogenous response of containment measures to the spread of the virus. To further account for expectations about the country-specific evolution of the pandemic, we also control for country-specific linear, quadratic, and cubic time trends. Another important empirical challenge is that containment measures have been introduced as parts of broader non-pharmaceutical interventions (NPIs) including enhanced testing, contact tracing and public information campaign aimed at increasing social awareness. To address this issue and disentangle the effect of

Mr. Pragyan Deb, Davide Furceri, Mr. Jonathan David Ostry, and Nour Tawk

effectively control for this endogenous response which would otherwise bias estimates of the effect of containment measures. The use of daily data allows us to address this issue by controlling for the change in the number of infected cases and deaths occurring a day before the implementation of containment measures, as well as for lagged changes in daily economic indicators. Indeed, given lags in the implementation of interventions at daily frequency, this approach effectively controls for the endogenous response of containment measures to the spread of the virus. To

Mr. Pragyan Deb, Davide Furceri, Mr. Jonathan David Ostry, and Nour Tawk
Containment measures are crucial to halt the spread of the 2019 COVID-19 pandemic but entail large short-term economic costs. This paper tries to quantify these effects using daily global data on real-time containment measures and indicators of economic activity such as Nitrogen Dioxide (NO2) emissions, flights, energy consumption, maritime trade, and mobility indices. Results suggest that containment measures have had, on average, a very large impact on economic activity—equivalent to a loss of about 15 percent in industrial production over a 30-day period following their implementation. Using novel data on fiscal and monetary policy measures used in response to the crisis, we find that these policy measures were effective in mitigating some of these economic costs. We also find that while workplace closures and stay-at-home orders are more effective in curbing infections, they are associated with the largest economic costs. Finally, while easing of containment measures has led to a pickup in economic activity, the effect has been lower (in absolute value) than that from the tightening of measures.
Mr. Pragyan Deb, Davide Furceri, Mr. Jonathan David Ostry, and Nour Tawk
Countries have implemented several containment measures to halt the spread of the 2019 coronavirus disease, but it remains unclear the extent to which these unprecedented measures have been successful. We examine this question using daily data on the number of coronavirus disease cases as well as on real-time containment measures implemented by countries. Results suggest that these measures have been very effective in flattening the “pandemic curve”, but there is significant heterogeneity across countries. Effectiveness is enhanced when measures are implemented quickly, where de facto mobility is curtailed, in countries with lower temperatures and population density, as well as in countries with a larger share of the elderly in total population and stronger health systems. We also find that easing of containment measures has resulted in an increase in the number of cases, but the effect has been lower (in absolute value) than that from a tightening of measures.
Metodij Hadzi-Vaskov and Mr. Luca A Ricci
Does gross or net debt matter for long-term sovereign spreads in emerging markets? The topic is important for undestanding the borrowing cost implications of public assetliability management decisions (e.g. using assets to lower debt). We investigate this question using data on emerging market economies (EMEs) over the period 1998–2014. We find that both gross debt and assets have a significant impact on long-term sovereign bond spreads in emerging markets, with effects roughly offsetting each other (coefficients of opposite sign and similar magnitude). Hence, net debt seems more appropriate than gross debt when evaluating the impact of indebtedness on spreads. The empirical results suggest that an increase in net debt by 10 percentage points of GDP implies an increase in the spread by 100–120 basis points, and the effect is larger during periods of domestic distress. The key results from this empirical study are quite robust to alternative specifications and subgroups of EMEs.
Metodij Hadzi-Vaskov and Mr. Luca A Ricci

estimation methods). Here, we briefly complement the main analysis by checking to what extent similar results extend also to risk measures in advanced economies as well as long-term interest rates in local currency. A. Advanced economies Table 10 investigates the role of government debt and assets for the credit default spread of advanced economies (a comparable measure to the spread of emerging markets): no effect is visible. For advanced economies, the more relevant price could be the one imbedded in long term local currency rates, so it would be more interesting