The economic impact of Covid-19 pandemic in Sardinia

Abstract

The spread of the Covid-19 pandemic forced Central and Local Governments to introduce a set of policy measures aimed at restraining the contagion among people. These interventions resulted in actions that put a brake on the production system and at the same time on the growth of aggregate demand. The economic impact is far-reaching, with direct, indirect and induced effects mainly related to the interconnection between production sectors and institutional sectors. In particular, the economic impact of Covid-19 crisis exacerbated in the territories where the economy mostly depends on tourism activities, which continues to suffer a decrease despite the interruption of containment measures. The crucial point in the current economic debate is the estimation of the impact these measures will have on economic systems, with the aim of assessing the regulatory mechanisms necessary for the restart of the economic system. In this work we propose an estimate analysis of the effect of the Prime Minister Decree (DPCM) of 22 March 2020 on the economic system of the Sardinia Region. The analysis is developed through the application of a SAM based CGE and the results are provided in terms of change in production, final demand and disposable income.