Impacts of COVID-19 pandemic on global poverty VAR Approach
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| Dokumentumtípus: | Diplomadolgozat |
| Kulcsszavak: | COVID-19 pandemic FDI inflows GDP per capita growth global poverty inflation macroeconomic variables restricted VAR trade unemployment VAR model |
| Online Access: | http://dolgozattar.uni-bge.hu/44218 |
| Kivonat: | The Coronavirus pandemic has had devastating effects on the world economy. Although the COVID-19 pandemic is almost over by 2022, it is crucial to investigate the effects of the pandemic on the economy and on other ongoing issues to handle them effectively and efficiently.The emergence of coronavirus pushed millions into poverty and caused to miss the target of poverty reduction by 2030. Therefore, it is worth shedding light on the main linkages between COVID-19 and global poverty for further steps in the goal of reducing poverty. This study examine the indirect impact of COVID-19 on global poverty through economic indicators, namely GDP per capita growth, unemployment, inflation, international trade, and foreign direct investment inflows. In order to estimate the impact of COVID-19 on global poverty, the vector autoregressive (VAR) model was employed to assess the existence of relationship among the six variables in six regions. The study utilised the secondary data obtained from World Bank database.Unemployment, GDP per capita, inflation, trade, FDI net inflows and poverty headcount ratio are used as variables in the analysis. The scope of the research covers the period between 1991-2019 while the observed regions are East Asia & Pacific, Europe & Central Asia, Latin America & Caribbean, Middle East & North Africa, South Asia, and Sub-Saharan Africa. The empirical findings show that poverty is expected to rise in all six regions due to COVID-19 crisis. The extent of the impact is expected to be higher. To revert back the impacts of COVID-19 on poverty and to regain the downward trend in poverty, this study recommends that nations should create more job supply to those with low education and income, some free educational trainings should be given to poor, nations should attract more foreign direct investment, exports should be expanded while imports should be limited to some level. Inflation helps poor people in some extent, but too high inflation will lead to unaffordable prices if wages are not adjusted quickly. |
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