Pandemic divergence: A short note on COVID-19 and global income inequality

The touristic and empty Serrano Square in the Palermo neighborhood with a delivery Rappi waiting for the next course. Argentina extended their lockdown through July 17, leaving the country's tourism industry reeling. Buenos Aires, Argentina - July 6, 2020.La place Serrano, vide dans le quartier touristique de Palermo. Une livreuse Rappi est assise en attendant la prochaine commandeL Argentine a prolonge le confinement jusqu au 17 juillet, impactant fortement l industrie du tourisme. Buenos Aires, Argentina - 6 juillet 2020.NO USE FRANCE


In this paper we provide an initial assessment of the economic losses related to the COVID-19 pandemic in two ways: as output contractions in 2020-2021 and as growth revisions (the estimated cumulative output loss in 2020-2030 based on growth forecasts before and after COVID-19). We find that, whereas the immediate GDP impact seems to favor poorer countries that were less intensely hit by the virus, the long-term economic cost correlates negatively with the country’s initial per capita GDP, worsening global income inequality. The note identifies empirically some of the key drivers of these country differences (e.g., informality, tourism dependence, fiscal space) and provides broader estimates of COVID-related economic loss that incorporate the costs associated with fiscal stimuli, excess deaths, and education lockdowns.

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