Pandemic divergence: A short note on COVID-19 and global income inequality

In this paper we provide an initial assessment of the economic losses related to the COVID pandemic in three ways: based on growth revisions (as the output downgrade in 2020, and as the estimated cumulative output loss over a 10-year period and based) and incorporating the cost associated with the fiscal stimuli and other, harder-to-asses aspects such as education or jobs. We find that, whereas the immediate GDP impact seems to favour poorer countries that were more modestly hit by the virus, the long-term economic cost is much larger (in the order of one to two GDPs) and correlate negatively with the country´s initial per capita GDP, worsening global income inequality.