Government measures and economic activity during the COVID-19 outbreak: some preliminary short-term evidence from Europe

Abstract The present contribution is aimed at offering evidence of the impact of anti- COVID government actions on trade. Using monthly Eurostat data, it investigates the relationship between the turnover of sales and the adoption of governmental measures. Explanatory variables encompass three indexes measuring the government response, namely, a stringency, a health containment and an economic support index. A consumer confidence index is used as control variable. It has been estimated through a generalised least squares model with heteroskedasticity and autocorrelation. The results outline that the percentage change of the index of deflated turnover of retail sale of food, beverages and tobacco is positively correlated with consumer confidence and negatively correlated with restrictive governmental measures. It is also determined that the percentage change of theindex of deflated turnover of retail sale via internet is positively correlated with stringency governmental measures, this confirms the growing importance of internet as channel for trade.