Our global GS Effective Lockdown Index (ELI) – a combination of official restrictions and actual mobility data from 46 economies, weighted by PPP GDP – tightened in the third week of January.
Using our estimated relationship between the GS ELI and real activity, we see an ELI-implied hit of nearly 10% ELI-implied hit to the level of global GDP in the third week of January versus a peak 20% hit in mid-April last year. However, the actual impact is likely smaller than estimated using the historical ELI-GDP relationship, due to a potential decline in the sensitivity of consumer and firm behavior to policy restrictions.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
