Using mobility measures to explain short-run economic performance during COVID’s first wave

Abstract

People’s mobility behavior and self-correcting economic forces are shown to be key variables in explaining the observed contraction and recovery of the Bolivian economy during Covid’s first wave. ARMAX models are used to explain the growth rate of the monthly index of economic activity in terms of changes in the rate of mobility measures produced by Google, which are argued to capture the complex interactive dynamics of Covid epidemiology, Covid policy and people’s own decisions to minimize health risks, however generating a trade-off with inevitable economic sacrifice, thus affecting aggregate economic activity.