Easing the Pain? Estimating the Economic Impact of Domestic and Global Policy Responses to the COVID-19 Pandemic

  • Thomas Conefrey Central Bank of Ireland
  • Niall McInerney Central Bank of Ireland
  • Gerard O'Reilly Central Bank of Ireland
  • Graeme Walsh Central Bank of Ireland


The COVID-19 pandemic and the measures put in place to control its spread resulted in a collapse in global economic activity. Both governments and central banks responded to the deep economic crisis with unprecedented policy interventions. In this paper, we use both a global and a domestic structural macroeconomic model to estimate the impact of these exceptional policy supports on the international economy and on Ireland. Our analysis seeks to quantify the positive spillovers to the Irish economy from the fiscal, monetary and macroprudential policy interventions introduced globally and describes the transmission channels through which these policy actions affect Ireland. We also estimate the impact on economic activity and the labour market of the unprecedented fiscal packages introduced in Ireland. Our results indicate that the combination of international and domestic policy interventions have helped to substantially reduce the fall in output in Ireland from COVID-19, boosting growth in 2020 by up to 8 percentage points.

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