The Impact of the Pandemic on US States: GDP and Deaths

Following up on my recent post on country GDP growth rates and mortality in 2020, we now have the first look at state GDP growth rates for 2020 from the BEA.

As with the national data, I would look to caution against over-interpreting this data. I’m presenting it here to give a picture of how 2020 went for states (including a few months of 2021 for morality data). One thing you will notice is that there appears to be little correlation with the raw data between GDP declines and mortality. Lots of important factors (policy, behavior, demographics, weather, luck) aren’t controlled for here. Still, I think it’s useful to see all the data in one picture, given how much many of us have been following the daily, weekly, and monthly releases.

Here is the data. Below I’ll explain more how I created this chart, especially the excess mortality data.

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GDP Growth in 2020

Last year was a historically bad year for many reasons, but to economists that badness is most visible in our widest measure of the economy: Gross Domestic Product. All issues with GDP aside, especially as a perfect measure of relative living standards, the annual real (inflation-adjusted) growth rate of GDP gives us a good picture of how much national economies were harmed by the pandemic, private behavior changes, and government restrictions (disentangling these three effects is hard — I will leave that to the academic journals rather than a blog post).

While GDP is reported with a lag of several months and is subject to revision, many countries have now reported full GDP data for 2020. For those that don’t follow GDP very closely, for a developed country an annual rate of growth of about 2% is pretty normal and respectable. For further context, in the US recent recessions had declines of -2.5% in 2009, -0.1% 1991, and -1.8% in 1982 (the 2001 recession never had an annual decline, only a few quarterly declines). While it is unusual for countries to go more than 10 years without a decline, it does happen. For example, Australia’s last annual decline was in 1991, when it declined -1.3%. But that’s unusual.

This chart shows the 2020 GDP growth rates (mostly negative, with one exception — Taiwan) for 2020 for most countries were I could find data. What this number shows us is the total amount of economic activity in 2020 compared with the total amount of economic activity in 2019 (adjusted for inflation, of course). I believe this is a better measure than others you might see, such as data that compares the level in the 4th quarters of 2020 and 2019 (a country could have had a terrible 2nd quarter but still gotten back close to the prior year level, and a simple Q-over-Q measure would miss that decline). As I did for the 3rd quarter data, this chart also plots the cumulative COVID-19 death rates on the vertical axis.

GDP data comes from government statistical agencies and media reports. COVID-19 death data is from Our World in Data.

What can we learn from this data?

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Economic Research on COVID-19

The past 12 months has been dominated by COVID-19, the related recession, the government response, and other matters. But it has not just dominated our lives, it has also dominated new research, including research by economists!

Working papers from the National Bureau of Economic Research are one place to track on-going research by economists. While not all economic research is released as an NBER working paper (there are other series, and some economists just post them on their own website or department page), the volume of NBER papers should tell us something about the trends.

Here’s a chart showing the weekly NBER working papers that are in some way related to COVID-19. The first batch of three papers was released in late February, one long year ago. The second batch of nine papers came one month later. Since then, there have been papers released every single week, with the exception of the week of Christmas.

In total, there have 373 papers released that relate to COVID-19. The peak comes in late May and early June, with 61 papers released in a 4-week period and 21 of those papers coming out on May 25 alone. Since the May-June peak, we’ve seen a slow decline in papers on COVID-19, and we are now at our lowest level, with just 14 papers released in the past 4 weeks.

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