The extent of the damage to the economy will depend on many factors, the steps the authorities will take to improve the health situation and how much economic support governments are willing to provide during the immediate impact of the epidemic and its aftermath. The most affected sectors of the economy are the tourism sector and related industries, the air transport sector, etc. Damage will be suffered by the hotel and restaurant sectors that are part of international tourism. Damage will be inflicted on film companies, and generally on industries that have low-level mechanisms that have a significant concentration of labor such as call-centers.
COVID-19 and economic activity in Europe…
Electricity is an input in most of economic activity and is difficult to substitute in the short run. Electricity usage is a very useful high-frequency indicator of economic fluctuations, and data on electricity usage are available with almost no lag for many European countries (Cicala 2020). Despite lower energy prices, weekly (workdays) electricity usage has been declining in most European countries: for the median country in our sample, electricity usage was about 5% lower than in 2019 during early March and the drop accelerated to 15% during mid-April. According to our energy elasticity estimates, during a crisis, a 1% drop in electricity usage is associated with 1.3% to 1.9% lower output.
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