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Graphing the Pandemic Economy

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HANGZHOU/MILAN – COVID-19 is an unprecedented challenge for human society and the global economy. The pandemic has already taken more than 360,000 lives worldwide, and inflicted massive negative shocks on incomes, output, and employment. The challenge for policymakers is to strike a proper balance between containing the virus and creating the conditions for economic recovery.

That is no easy task. While key measures such as testing, contact tracing, and social distancing happen to align well with both overarching goals, measuring real-time progress in each dimension is difficult. Direct measures like GDP tend to arrive with a significant lag, which makes it harder to determine when to reopen various economic sectors and activities.

The Mobility Window

Fortunately, there is an immediately observable, high-frequency indicator of COVID-19’s economic impact: mobility data, which can serve as a proxy for the broader contraction in economic activity around the globe. Following this insight, we have calculated mobility on the basis of aggregated, anonymized data published by Google, Apple, AMAP, and Baidu.

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    Google, for example, publishes mobility information on retail and recreation, groceries and pharmacies, and workplaces, which we have combined into a single index. Apple publishes mobility data on driving, transit, and walking. And AMAP and Baidu publish location-based services (LBS) mobility data. Most important, these data are updated frequently – either on a weekly or even daily basis.

    We have tracked the extent of mobility (as a percentage of its level in normal times) across 131 economies. Google data was the primary source for 129 economies, Apple data for Russia, and AMAP and Baidu data for mainland China.

    Among the 19 countries and regions that have announced first-quarter GDP, we find that three-quarters of the variation in GDP growth can be explained by differences in mobility during this period (Figure 1). This variability across countries results from the fact that the virus arrived at different times during the quarter, and triggered mobility responses of varying speed and intensity.

    To be sure, mobility is only one indicator of economic contraction. Risk avoidance by individuals, companies, and other institutions also could play a role in depressing economic activity, even in the absence of mandated lockdowns. But as a variable that captures the state of economic activity, mobility has several major advantages.

    First, it is one of the few big-data metrics that both captures current activities and is available in more than 130 economies on a daily basis. Second, it is an endogenous variable, in the sense that it reflects both the impact of lockdowns and people’s choices, which often are motivated by risk aversion. And, third, it appears to capture a substantial........

    © Project Syndicate