The effect of actual and expected income shocks on mental wellbeing: Evidence from three East Asian countries during COVID-19.

This paper evaluates the effects of economic shocks to current and expected income reduction on mental wellbeing. We use individual-level data from three East Asian countries; China, Japan, and South Korea, during the early phases of the pandemic when the COVID-induced economic shocks were severe. The findings reveal significant causal effects from current and expected income reduction on different aspects of mental health deterioration, including anxiety, trouble sleeping, boredom, and loneliness. Interestingly, we found that expectations of future income loss have a significantly larger effect on people's mental wellbeing compared to current falls in income. This has significant implications for the design of policies to support income during pandemics.

Job loss and mental disorders: International evidence from the early stages of COVID-19 outbreak.

Using a rich individual level dataset from six countries, we examine the relationship between job loss and mental disorders during the first phase of the COVID-19 pandemic. We consider four indicators of mental disorders based on their severity, viz. anxiety, insomnia, boredom, and loneliness. We draw our conclusions based on two groups of countries that differ by the timing of their peak infections count. Using a logit and a two-stage least squares (TSLS) regression methods, we find that the people who lost their jobs due to the pandemic are more likely to suffer from mental disorders, especially insomnia and loneliness. Additionally, people with financial liabilities, such as housing mortgages, are among those vulnerable to anxiety. Women, urban residents, youth, low-income groups, and tobacco users are more prone to mental disorders. The findings from this research have significant policy implications on infectious disease control measures and mental health conditions due to lockdowns and social distancing.

The effect of nonpharmaceutical interventions on COVID-19 infections for lower and middle-income countries: A debiased LASSO approach.

This paper investigates the determinants of COVID-19 infection in the first 100 days of government actions. Using a debiased LASSO estimator, we explore how different measures of government nonpharmaceutical interventions affect new infections of COVID-19 for 37 lower and middle-income countries (LMCs). We find that closing schools, stay-at-home restrictions, and contact tracing reduce the growth of new infections, as do economic support to households and the number of health care workers. Notably, we find no significant effects of business closures. Finally, infections become higher in countries with greater income inequality, higher tourist inflows, poorly educated adults, and weak governance quality. We conclude that several policy interventions reduce infection rates for poorer countries. Further, economic and institutional factors are important; thereby justifying the use, and ultimately success, of economic support to households during the initial infection period.

Do managed exchange rates and monetary sterilization encourage capital inflows?

Economies with exchange rate pegs generally attract higher capital inflows either through lower transaction costs of trade and finance, or by encouraging investors to exploit any interest differentials, or where foreign exchange (FX) interventions are sterilized, any previous interest differentials are preserved. This paper examines these relationships using FDI, portfolio and bank inflows for 28 emerging market economies. We find that greater fixity of the exchange rate and sterilized intervention can potentially encourage capital inflows, and that the effect is magnified when combined. Further, we find that the effect differs by region, and it is larger for higher inflows.