• Antonio Montilla
Ricard Murillo Gili
• Jordi Singla
• Tiago Belejo Correia
• José Ramón Díez
• Clàudia Canals
• Nuria Bustamante
Sergio Díaz
• Javier García Arenas
Alberto Graziano
Eduard Llorens i Jimeno
Màxim Ventura Bolet
• Javier García Arenas
• José Ramón Díez
• Oriol Aspachs
• Eduard Llorens i Jimeno
Javier García Arenas
Màxim Ventura Bolet
• Javier García Arenas
Eduard Llorens i Jimeno
Màxim Ventura Bolet
• Rita Sánchez Soliva
• Clàudia Canals
• Luís Pinheiro de Matos
• José Ramón Díez
• Oriol Aspachs
• Alberto Graziano
Josep Mestres Domènech
• Màxim Ventura Bolet
• Clàudia Canals
José Ramón Díez
• Antonio Montilla
• Javier García Arenas
Ricard Murillo Gili
• Javier García Arenas
• Enric Fernández
• Paula Gonçalves
Daniel Belo
Teresa Gil Pinheiro
• Oriol Aspachs
Àlex Ruiz
• Pablo Pastor y Camarasa
Clàudia Canals
Javier García Arenas
Eduard Llorens i Jimeno
• Álvaro Leandro
Eduard Llorens i Jimeno
• Daniel Belo
• Javier García Arenas
• Clàudia Canals
• Oriol Aspachs
• Oriol Aspachs
• Javier García Arenas
• Oriol Carreras Baquer
• Oriol Aspachs
• Teresa Gil Pinheiro
• ## Evolución de la desigualdad en tiempo real y efectividad del estado del bienestar para amortiguar el impacto de la crisis

España
spanish

Oriol Aspachs (CaixaBank Research), Ruben Durante (ICREA-UPF, IPEG y Barcelona GSE), Alberto Graziano (CaixaBank Research), Josep Mestres (CaixaBank Research), Jose G. Montalvo (UPF, IPEG y Barcelona GSE) y Marta Reynal-Querol (ICREA-UPF, IPEG y Barcelona GSE).

Oriol Aspachs
Alberto Graziano
Josep Mestres Domènech
España
COVID-19
• Álvaro Leandro
• Clàudia Canals
Oriol Carreras Baquer
• Clàudia Canals
Oriol Carreras Baquer
• Clàudia Canals
Oriol Carreras Baquer
• Vânia Duarte
• Clàudia Canals
• Oriol Aspachs
• Javier García Arenas
• Oriol Aspachs
• Javier Ibáñez de Aldecoa Fuster
Eduard Llorens i Jimeno
• Javier García Arenas
• Oriol Aspachs
Ruben Durante
Alberto Graziano
Josep Mestres Domènech
Jose G. Montalvo
Marta Reynal-Querol
• Oriol Aspachs
Ruben Durante
Alberto Graziano
Josep Mestres Domènech
Jose G. Montalvo
Marta Reynal-Querol
• Enric Fernández
• Oriol Aspachs
Ruben Durante
Alberto Graziano
Josep Mestres Domènech
Jose G. Montalvo
Marta Reynal-Querol
• Luís Pinheiro de Matos
Ricard Murillo Gili
• Àlex Ruiz
• Javier Ibáñez de Aldecoa Fuster
Eduard Llorens i Jimeno
• Álvaro Leandro
• Oriol Carreras Baquer
Javier García Arenas
• ## A green, social and digital recovery

catalanspanish

15 Jul 2022

13 Jan 2022

## How do we spend throughout the month?

Màxim Ventura Bolet
17 Dec 2021

At this point in the pandemic, no-one is in any doubt that the economic scenario largely depends on how the health situation will develop. After a period of relative normality during the summer, a large number of European countries have had to step up restrictions on people’s movements and business activity. The economic impact of this second wave is considerable, although clearly less than the effect of the strict lockdowns imposed in Q2. This situation has worsened the economic outlook for the beginning of 2021, although the outlook for the spring is more promising with hopes being placed on the availability of a COVID-19 vaccine and other measures to help strengthen the health strategy (such as the low-cost, rapid testing of large numbers of the population).

Activity in Spain’s real estate market is recovering from its extraordinary slump during the first lockdown. In Q3 2020, house sales and new building permits recovered much of the ground lost, a positive trend we expect to consolidate in 2021. Moreover, the impact of the crisis on house prices has been relatively moderate so far, although we expect these will continue to adjust in the latter part of 2020 and the first half of 2021. In particular, CaixaBank Research’s new house price forecasting models at the level of province, based on large amounts of information (big data) and applying machine learning techniques, predict that house prices will fall in 7 out of 10 Spanish provinces in 2021 and grow very moderately in the rest.

However, it is important to remember that the economic impact of COVID-19 is huge and the effects of the pandemic on the sector will take time to disappear completely. The Recovery Plan for Europe, or Next Generation EU (NGEU), allocated a substantial sum of 750 billion euros, will be decisive in helping to boost the recovery. One of the EU’s main targets, which this recovery plan aims to support significantly, is the ecological transition to become climate-neutral by 2050. In the EU, buildings are responsible for emitting about 40% of the gases that cause global warming. The involvement and commitment of the construction industry is therefore essential to reduce greenhouse gas emissions to the agreed targets, while more energy-efficient «smart» buildings also support another of the Commission’s key targets: digital transition.

These European funds represent a unique opportunity to modernise Spain’s economy, which will receive around 72 billion euros in non-refundable transfers between 2021 and 2026, equivalent to 5.8% of its GDP in 2019. About 6% of the European NGEU funds will be aimed at renovating housing, tripling public investment in this area. In particular, the government plans to recondition 500,000 homes between 2021 and 2023. This target, if achieved, would be very positive for the sector but it is highly ambitious since it requires multiplying the current reconditioning rate by six in just three years.

In addition to renovations, another priority for housing policy over the coming years is the improvement of social housing. The severe economic and social impact of the COVID-19 crisis has highlighted the need to provide a large number of rented social housing to resolve the current shortage and be able to ensure the most vulnerable sections of the population have somewhere to live. Policies that should drive a green, social and digital recovery.

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• Laura Becerra
Clàudia Canals
Oriol Carreras Baquer
• Enric Fernández
• Oriol Aspachs
• Enric Fernández
• Oriol Aspachs
• Vânia Duarte
• Enric Fernández
• Oriol Aspachs
• Eduard Llorens i Jimeno
• Paulo Eduardo Carlos
• Luís Pinheiro de Matos
Javier García Arenas
• Oriol Aspachs
• Álvaro Leandro
Eduard Llorens i Jimeno
• Teresa Gil Pinheiro
• Eduard Llorens i Jimeno
• Javier García Arenas
Alberto Graziano
Josep Mestres Domènech
Eduard Llorens i Jimeno
• José Ramón Díez
• Oriol Aspachs
• Vânia Duarte
• Clàudia Canals
Antonio Montilla
• Luís Pinheiro de Matos
• José Ramón Díez
• Teresa Gil Pinheiro
• Sergio Díaz
• Javier García Arenas
• Oriol Aspachs
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# The COVID-19 dilemma: mobility and economy

At a time when many countries are beginning to gradually lift the lockdown measures, and with the first estimates of GDP for Q1 2020, we can begin to glimpse the impact of the social distancing measures on the economy in this second quarter of 2020.

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Pablo Pastor y Camarasa
June 15th, 2020

• The differences between countries in the severity and duration of the lockdown measures at the beginning of the year have been reflected in the declines in GDP in Q1.

• In Q2, the epicentre of the pandemic (and the lockdown) has moved from China to Europe and America, which will result in unprecedented declines in economic activity in the major advanced economies.

The struggle to contain the pandemic has forced most governments to impose lockdown measures for the population. The objective was (and remains) to minimise the human cost of COVID-19, to prevent hospitals from being overrun and to buy time in order to learn more about and thus combat the virus. However, restrictions on mobility come with a significant economic cost. At a time when many countries are beginning to gradually lift the lockdown measures, and with the first estimates of GDP for Q1 2020, we can begin to glimpse the impact of the social distancing measures on the economy in this second quarter of 2020.

### What Q1 taught us

China went into lockdown in January and the measures were maintained throughout February and March. Most European and American countries, meanwhile, began to impose restrictions on mobility at the end of Q1, but these restrictions remained in place and even intensified during April and May. Indeed, whereas in Q1 the epicentre of the pandemic was in China, it shifted to Europe in April and then to the American continent in May (see first chart).

The differences between countries in the severity and duration of the lockdown measures imposed during the first three months of the year have been reflected in significant diversity in the declines in GDP that their economies suffered in Q1. This relationship between lockdown and economic activity can be clearly observed in the following two charts. Countries with stricter lockdown measures imposed during the first few months of the year – and thus with lower levels of mobility for their citizens – have also suffered the greatest declines in economic activity. For instance, in China, a country with severe lockdown measures in place throughout Q1, GDP contracted by –9.8% (in quarter-on-quarter terms); in Italy and Spain, where the lockdown policies came later but were strict, the decline was of around –5%; while in Germany and the US, countries whose lockdown measures came later and were less severe, the contraction amounted to –2.2% and –1.2%, respectively.1

### Lockdown, the de-escalation and the economic impact in Q2

The greater incidence of lockdown and social distancing measures during Q2 in Europe and the US will undoubtedly deal an unparalleled blow to these regions’ economies. However, differences both in the severity of the lockdown measures and in the de-escalation plans of the different countries will again lead to significant differences in economic activity. Let us consider these differences by taking advantage of the statistical relationship between the two variables.

Firstly, we conducted an analysis that relates the strictness of the lockdown in place during the first three months of the year, measured using the University of Oxford's lockdown stringency index, with the impact on economic activity in major economies.2 We then take this relationship established between lockdown stringency and economic activity and extrapolate it to Q2, based on the severity of the lockdown measures in place during April and May and those projected for June according to the de-escalation plans announced by the various governments.

As the last chart shows, this exercise indicates that the declines in economic activity caused by the lockdown and social distancing measures will intensify in Q2 in the major advanced economies. This is a logical result in that more weeks of the second quarter have been affected by these measures. Nevertheless, it is interesting to note how the magnitude of the lockdown's impact on economic activity varies by country. In particular, in Spain and France the severity of the lockdown would point towards a drop in economic activity of around 20% quarter-on-quarter, since the lockdown and social distancing measures have been more severe than in most advanced economies and they are being lifted more gradually. At an intermediate level we would find Portugal, with a decline in economic activity that is still substantial but somewhat less pronounced (of the order of 15%). Finally, the economic impact in Germany and the US is estimated to be lower (around 10%), with measures that have been more lax and less widespread.

The indices that capture the strictness of the social distancing measures implemented to curb the spread of COVID-19 provide us with a notion of how severe the declines in economic activity in Q2 could be in the major advanced countries. However, the uncertainty surrounding the available economic activity data and the difficulty in estimating sudden and profound economic movements compel us to take the results obtained with caution. Moreover, the decline that finally materialises will depend on many other factors, such as the success with which the various economies have embraced remote working practices and the magnitude of the economic policy responses to cushion the impact of the shock.

1. These are the first GDP estimates for Q1. Given the exceptional nature of the pandemic, they will likely be subject to more revisions than usual.

2. More specifically, we estimate the following equation:

$$GDP growth_{i,t}\;=\delta_0\;+\delta_1\triangle\;Lockdown\;stringency\;index_{i,t}\;\;+\;\delta_i\;+\;\delta_t\;+\;\varepsilon_{i,t}$$, where $$\;\delta_1\;+\;\delta_t$$ are fixed country and month effects, respectively, and $$\triangle$$ represents the change in time. To perform this estimate, we used panel data from 11 countries for January, February and March. Note that we use month-on-month figures for GDP growth, calculated using the quarter-on-quarter growth for Q1 and economic activity indicators for the same quarter. The fixed effects may already be controlled by elements such as the potential for the adoption of remote working in the various countries. For a detailed analysis of the relationship between economic activity and remote working in the context of the COVID-19 outbreak, see the Focus «The COVID-19 outbreak provides a boost to remote working» in this same Monthly Report.

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