A study of the Danish economy during the Covid-19 pandemic and the socioeconomic conditions that influence the severity of the pandemic
Authors
Jensen, Jens Kramer Rold ; Hovaldt, Mads ; Yao, Qi
Term
4. term
Education
Publication year
2022
Submitted on
2022-06-03
Abstract
This thesis examines the impact of the Covid-19 pandemic in Denmark along two dimensions: the drivers of infection spread and financial market volatility. The first part uses a panel data framework across Danish areas to assess how the rate of spread is influenced by socioeconomic conditions and policy interventions. The results indicate that areas with higher shares of service-oriented employment, larger populations of children, and fewer square meters per person in urbanized settings experienced larger increases in spread. Preventive policies were also more effective in areas with many service jobs and many children. The second part evaluates the Danish economy before and during the pandemic using a regime-switching GARCH model with the OMX C25 index as a proxy. The analysis finds a 32% increase in mean conditional volatility during the pandemic. In addition, capitalization-weighted regional equity indices were constructed to assess whether volatility rose uniformly across the country. All regional indices were affected, though to varying degrees. Overall, the study highlights that socioeconomic structures shape both transmission dynamics and the effectiveness of interventions, while financial market turmoil increased markedly during the pandemic.
Denne afhandling undersøger Covid-19-pandemiens betydning i Danmark i to spor: smittespredningens drivkræfter og økonomisk markedsvolatilitet. Første del anvender et paneldata-setup på tværs af danske områder til at vurdere, hvordan smittens spredningshastighed påvirkes af socioøkonomiske forhold og politiske indgreb. Resultaterne peger på, at områder med højere andele af serviceorienterede jobs, mange børn i befolkningen og færre kvadratmeter pr. borger i byområder oplevede større stigninger i smittespredningen. Samtidig var smitteforebyggende tiltag mest virkningsfulde i områder med mange servicejobs og mange børn. Anden del evaluerer den danske økonomi før og under pandemien ved hjælp af en regime-skiftende GARCH-model med OMX C25 som indikator. Analysen finder en stigning på 32% i den gennemsnitlige betingede volatilitet under pandemien. Derudover konstrueres kapitaliseringsvægtede regionale aktieindeks for at vurdere, om volatiliteten steg ensartet på tværs af landet. Alle regionale indeks blev påvirket af pandemien, om end i varierende grad. Samlet understreger studiet, at socioøkonomiske strukturer både former smittedynamikker og påvirker effekten af tiltag, mens den finansielle markedsuro tiltog markant under pandemien.
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