This paper develops a methodology for tracking in real time the impact of the COVID-19 pandemic on economic activity by analyzing high-frequency electricity market data. The approach is validated by several robustness tests and by contrasting our estimates with the official statistics on the recession caused by COVID-19 in different European countries during the first  two quarters of 2020. Compared with the standard indicators, our results are much more chronologically disaggregated and up-to-date  and, therefore, can inform the current debate on the appropriate policy response to the pandemic. Unsurprisingly, we find that nations that experienced the most severe initial outbreaks also grappled with the hardest economic recessions. However, we detect diffused signs of recovery, with economic activity in most European countries returning to its pre-pandemic level by August 2020. Furthermore, we show how delaying intervention or pursuing 'herd immunity' are not successful strategies , since they increase both economic disruption and mortality. The most effective short-run strategy to minimize the impact of the pandemic appears to be the introduction of early and relatively less stringent non-pharmaceutical interventions .
This paper develops a methodology for tracking in real time the impact of shocks (such as natural disasters, financial crises or pandemics) on gross domestic product (GDP) by analyzing high-frequency electricity market data. As an illustration, we estimate the GDP loss caused by COVID-19 in twelve European countries during the first wave of the pandemic. Our results are almost indistinguishable from the official statistics of the recession during the first two quarters of 2020 (correlation coefficient of 0.98) and are validated by several robustness tests. However, they are also more chronologically disaggregated and up-to-date than standard macroeconomic indicators and, therefore, can provide crucial and timely information for policy evaluation. Our results show that delaying intervention and pursuing 'herd immunity' have not been successful strategies so far , since they increased both economic disruption and mortality. We also find that coordinating policies internationally is fundamental for minimizing spillover effects from NPIs across countries .
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the COVID-19 pandemic on economic activity
shocks (such as natural disasters, financial crises or pandemics) on gross domestic product (GDP)
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The approach is validated by several robustness tests and by contrasting our estimates with the official statistics on the recession
As an illustration, we estimate the GDP loss
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different
twelve
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wave of the pandemic. Our results are almost indistinguishable from the official statistics of the recession during the first
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2020. Compared with the standard indicators, our results are much
2020 (correlation coefficient of 0.98) and are validated by several robustness tests. However, they are also
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than standard macroeconomic indicators
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inform the current debate on the appropriate policy response to the pandemic. Unsurprisingly, we find that nations that experienced the most severe initial outbreaks also grappled with the hardest economic recessions. However, we detect diffused signs of recovery, with economic activity in most European countries returning to its pre-pandemic level by August 2020. Furthermore, we show how delaying intervention or
provide crucial and timely information for policy evaluation. Our results show that delaying intervention and
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are not successful strategies
have not been successful strategies so far
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increase
increased
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The most effective short-run strategy to minimize the impact of the pandemic appears to be the introduction of early and relatively less stringent non-pharmaceutical interventions
We also find that coordinating policies internationally is fundamental for minimizing spillover effects from NPIs across countries