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Following the Great Lockdown in 2020, it is important to take stock of lessons learned. How effective have different containment measures been in slowing the spread of Covid-19? Have containment measures been costly in terms of economic growth, fiscal balances, and accumulated debt? This paper finds that countries with previous SARS experience acted fast and "smart", and were able to contain the virus by relying mainly on public health measures ─ testing, contact tracing, and public information campaigns ─ rather than stay-at-home requirements. Using past coronavirus outbreaks as an instrumental variable, we show that countries with past experience were able to contain the virus in a smart way, reducing transmission and deaths while also experiencing higher economic growth in 2020.

Macroeconomics --- Economics: General --- International Economics --- Diseases: Contagious --- Foreign Exchange --- Informal Economy --- Underground Econom --- Health Behavior --- Health: General --- Fiscal Policy --- Aggregate Factor Income Distribution --- Economic & financial crises & disasters --- Economics of specific sectors --- Infectious & contagious diseases --- Health economics --- Financial crises --- Economic sectors --- COVID-19 --- Health --- Fiscal stance --- Fiscal policy --- Income --- National accounts --- Communicable diseases --- Currency crises --- Informal sector --- Economics --- Hong Kong Special Administrative Region, People's Republic of China

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This paper assesses progress made in deepening and integrating systemic risk analysis and macroprudential policy advice in Article IV consultations following up on the findings of the IEO evaluation. The assessment informs the Comprehensive Surveillance Review and the FSAP Review in their recommendations to strengthen these areas in Article IV consultations. The findings point to notable improvements made since the launch of the macrofinancial mainstreaming initiative, particularly in staff reports for advanced economies and in covering bank and credit-related risks.

Hong Kong Special Administrative Region, People's Republic of China --- Money and Monetary Policy --- Political Economy --- Finance: General --- Macroeconomics --- Monetary Policy --- General Financial Markets: Government Policy and Regulation --- Financial Markets and the Macroeconomy --- Financial Institutions and Services: Government Policy and Regulation --- Monetary economics --- Political economy --- Finance --- Monetary policy --- Macroprudential policy --- Financial sector policy and analysis --- Systemic risk --- Systemic risk assessment --- Stress testing --- Financial sector stability --- Economics --- Financial risk management --- Economic policy --- Financial services industry

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Following the Great Lockdown in 2020, it is important to take stock of lessons learned. How effective have different containment measures been in slowing the spread of Covid-19? Have containment measures been costly in terms of economic growth, fiscal balances, and accumulated debt? This paper finds that countries with previous SARS experience acted fast and "smart", and were able to contain the virus by relying mainly on public health measures ─ testing, contact tracing, and public information campaigns ─ rather than stay-at-home requirements. Using past coronavirus outbreaks as an instrumental variable, we show that countries with past experience were able to contain the virus in a smart way, reducing transmission and deaths while also experiencing higher economic growth in 2020.

Hong Kong Special Administrative Region, People's Republic of China --- Macroeconomics --- Economics: General --- International Economics --- Diseases: Contagious --- Foreign Exchange --- Informal Economy --- Underground Econom --- Health Behavior --- Health: General --- Fiscal Policy --- Aggregate Factor Income Distribution --- Economic & financial crises & disasters --- Economics of specific sectors --- Infectious & contagious diseases --- Health economics --- Financial crises --- Economic sectors --- COVID-19 --- Health --- Fiscal stance --- Fiscal policy --- Income --- National accounts --- Communicable diseases --- Currency crises --- Informal sector --- Economics --- Covid-19

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This note provides an update and assessment of developments in insurance supervision since 2014. It is part of the 2020 Financial Sector Assessment Program (FSAP) for the Hong Kong SAR (HKSAR) and draws on discussions there from September 10 to 24, 2019. It has not been updated for the impact of recent global events associated with the COVID-19 pandemic. The insurance sector is large, especially long-term (life) insurance, highly international and has been growing steadily. The long-term market is amongst the world’s largest, particularly by penetration (premiums to GDP). Growth has been supported by the popularity of savings products, including sales of policies to Mainland Chinese visitors (MCVs), although these have declined from their peak. The general insurance sector, though comprising many more companies, is relatively small and spread over many lines. The authorities have identified scope for growth in protection policies as well as opportunities for captive and specialty lines related to China’s Belt and Road Initiative. Tax incentives have supported the recent successful introduction of new annuity and health insurance products. Although foreign-owned companies account for a large share of business, the HKSAR is the home of three major domestic groups operating internationally.

Money and Monetary Policy --- International Economics --- Industries: Financial Services --- Insurance --- Finance: General --- Business and Financial --- Monetary Policy --- International Agreements and Observance --- International Organizations --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Insurance Companies --- Actuarial Studies --- General Financial Markets: Government Policy and Regulation --- Bankruptcy --- Liquidation --- Monetary economics --- International institutions --- Finance --- Insurance & actuarial studies --- Financial services law & regulation --- Monetary policy --- International organization --- Insurance companies --- Financial institutions --- Financial Sector Assessment Program --- Financial sector policy and analysis --- Solvency --- Insurance supervision --- Financial regulation and supervision --- International agencies --- Financial services industry --- Nonbank financial institutions --- Law and legislation --- Debt --- Hong Kong Special Administrative Region, People's Republic of China

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This paper explores the macroeconomic impact of social unrest, using a novel index based on news reports. The findings are threefold. First, unrest has an adverse effect on economic activity, with GDP remaining on average 0.2 percentage points below the pre-shock baseline six quarters after a one-standard deviation increase in the unrest index. This is driven by sharp contractions in manufacturing and services (sectoral dimension), and consumption (demand dimension). Second, unrest lowers confidence and raises uncertainty; however, its adverse effect on GDP can be mitigated by strong institutions and by a country’s policy space. Third, an unrest “event”, which is captured by a large change in the unrest index, is associated with a 1 percentage point reduction in GDP six quarters after the event. Impacts differ by type of event: episodes motivated by socio-economic reasons result in sharper GDP contractions compared to those associated with politics/elections, and events triggered by a combination of both factors lead to sharpest contractions. Results are not driven by countries with adverse growth trajectories prior to unrest events or by fiscal consolidations, and are robust to instrumenting via regional unrest.

Macroeconomics --- Economics: General --- International Economics --- Econometrics --- Finance: General --- Foreign Exchange --- Informal Economy --- Underground Econom --- Fiscal Policy --- Estimation --- Macroeconomics: Consumption --- Saving --- Wealth --- Business Fluctuations --- Cycles --- General Financial Markets: General (includes Measurement and Data) --- Economic & financial crises & disasters --- Economics of specific sectors --- Econometrics & economic statistics --- Economic growth --- Finance --- Financial crises --- Economic sectors --- Fiscal consolidation --- Fiscal policy --- Estimation techniques --- Econometric analysis --- Consumption --- National accounts --- Economic recession --- Emerging and frontier financial markets --- Financial markets --- Currency crises --- Informal sector --- Economics --- Econometric models --- Recessions --- Financial services industry --- Hong Kong Special Administrative Region, People's Republic of China