Regional economic impacts of COVID-19 lockdowns and mitigation effects of stimulus checks and unemployment insurance

Abstract

We develop a framework to simulate the regional economic impacts of crises using publicly available data, focusing on Southwest Florida during the COVID-19 pandemic. Building on existing literature, we use a partial hypothetical input–output extraction method integrating higher-frequency data to evaluate the effects of mitigation policies like stimulus checks and unemployment insurance. We simulate quarterly value-added and employment for Southwest Florida in 2020. Results show a sharp decline in value added in the second quarter, a strong third quarter rebound, and a slight contraction in the fourth quarter, with sectoral heterogeneity. Mitigation policies contributed to a partial recovery but were insufficient to fully offset the downturn in quarters two and four. While households received supplemental income, spending and savings patterns with supply constraints dominated the demand shock. Our framework expands on the existing tools in the literature, providing regional policymakers with a predictive evaluation method for crisis response strategies.