The Impacts of Ongoing Health Crisis Caused by Novel Coronavirus “COVID-19” on the Economics of the Countries ()
ABSTRACT
This study examines the impact of COVID-19 cases on
GDP growth and Unemployment in
developed countries represented by Germany, France, and Spain and developing countries represented by
Mexico, Uruguay, Brazil, Turkey, and
China. Various statistical tests were employed; ADF-Fisher Chi-Square
for stationarity, Pedroni Cointegration test, Hausemn test, and panel granger
causality test. The empirical results suggest that data from developed and
developing countries are stationary at I (1). The Pedroni cointegration test
revealed no long-run relationship between the dependent variables (Covid cases)
and independent variables represented by GDP growth and Unemployment. The Hausman
test showed that the fixed effect model is suitable for this study. The fixed
effect model’s estimation suggests that there is a positive and significant association between COVID-19 with
unemployment rate and GDP growth in industrialized countries. However,
in developing countries, the rise in COVID cases causes a decrease in GDP
growth and Unemployment. The study contribution is critically significant for
policymakers and scientists to set a plan for the comprehensive economic recovery
for the world after the pandemic.
Share and Cite:
Al-Masbhi, G. and Dureab, F. (2021) The Impacts of Ongoing Health Crisis Caused by Novel Coronavirus “COVID-19” on the Economics of the Countries.
Open Journal of Social Sciences,
9, 454-465. doi:
10.4236/jss.2021.99033.