Demand and Supply Dynamics in East Asia During the COVID-19 Recession

• Tác giả: Ergys Islamaj
• Ngôn ngữ: eng
• Ký hiệu phân loại: 338.9 Economic development and growth
• Thông tin xuất bản: World Bank, Malaysia, 2021
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 316762
• Chủ đề: 1. CORONAVIRUS; 2. COVID-19; 3. DEMAND SHOCK; 4. PANDEMIC IMPACT; 5. SUPPLY CHAIN

Tóm tắt

The COVID-19 (coronavirus) pandemic has devastated lives and damaged economies, requiring strong and decisive policy responses from governments. Developing the optimal short-term and long-term policy response to the pandemic requires understanding the demand and supply factors that drive economic growth. The appropriate policy response will depend on the size and duration of demand and supply shocks. This Research & Policy Brief provides a decomposition of demand and supply dynamics at the macroeconomic level for the large developing economies of East Asia. The findings suggest that both demand and supply shocks were important drivers of output fluctuations during the first year of the pandemic. The demand shocks created an environment of deficient demand - reflected in large negative output gaps even after the unprecedented policy response - which is expected to last through 2021. The extant deficient demand is suggestive of continued need to support the economic recovery. Its size should guide policy makers in calibrating responses to ensure that recovery is entrenched, and that short-term supply disruptions do not lead to long-term declines in potential growth.