Causal inference for the impact of economic policy on financial and labour markets amid the COVID-19 pandemic

Abstract

The COVID-19 pandemic has turned the world upside down since the beginning of 2020, leaving most nations worldwide in both health crises and economic recession. Governments have been continually responding with multiple support policies to help people and businesses overcoming the current situation, from “Containment”, “Health” to “Economic” policies, and from local and national supports to international aids. Although the pandemic damage is still not under control, it is essential to have an early investigation to analyze whether these measures have taken effects on the early economic recovery in each nation, and which kinds of measures have made bigger impacts on reducing such negative downturn. Therefore, we conducted a time series based causal inference analysis to measure the effectiveness of these policies, specifically focusing on the “Economic support” policy on the financial markets for 80 countries and on the United States and Australia labour markets. Our results identified initial positive causal relationships between these policies and the market, providing a perspective for policymakers and other stakeholders.

Urban Economic Resilience and Supply Chain Dynamics: Evaluating Monetary Recovery Policies in Global Cities during the Early COVID-19 Pandemic

“…Global initiatives included debt financing, tax exemptions, and employment promotion [27,28]. Studies advocate for bolstering infrastructure to support resilient supply chains [29,30] and underscore the pivotal role of these policies in enhancing supply chain efficiency [8,31] . Moreover, policies aimed at formalising informal trade and eliminating supply chain barriers are essential for ensuring uninterrupted supply, particularly in regions like sub-Saharan Africa and India [31][32][33].…”

“…Under such circumstances, their economic efficiency is naturally enhanced. Inputs for economic recovery policies can be strategically released in phases during their development, allowing for flexible adjustments based on the effectiveness of the policies [8]. This approach amplifies societal expectations of the government's ongoing dissemination of positive developments, in turn bolstering market confidence and public sentiment.…”

“…These measures have varied widely, from direct financial assistance to complex monetary policy adjustments designed to stabilise economies and support economic activity [5,6]. Local governments in major countries such as the United States and China have typically implemented specific, effective measures tailored to their unique circumstances [7,8]. However, the confluence of supply chain disruptions and evolving consumer behaviours requires innovative approaches tailored to these challenges [9,10].…”