The effect of COVID-19 pandemic on macroeconomic performance: An example of European Union

Causing severe problems for human health because of its quick spread, high number of cases, death rate, the Covid-19 epidemic also created economic problems. Especially so as to prevent the spread of the epidemic, applying measures like closing borders, lockdowns caused critical damage primarily to employment, trade, economic growth. In this research, effects of Covid-19 epidemic on the macroeconomic performances of European Union countries were investigated. Detecting the effects of the epidemic on macroeconomic performance is important to determine in terms of economic policies to be applied. Thus, to measure the macroeconomic performances of European Union countries for the 2013-2022 era, an index of macroeconomic performance was derived and the magic square method was used while doing so. As for the performance criteria of the magic square method, variables such as growth, inflation, unemployment, current account balance were used. Aside from equal weight methodology being used when it came to weighing those criteria, approaches like narrow core, wide core, Keynesian, Boratav-Heterodox were adopted. According to the findings obtained research, in the periods 2013-2022 taking into account the AB27 group, the year 2021 is the year with the highest macroeconomic performance according to the minimum- maximum method normalized values and all weighting approaches. The year with the lowest macroeconomic performance is 2020 according to the magic square and Boratav-Heterodox approaches, 2022 according to the narrow and broad core approaches and 2013 according to the Keynesian approach: According to the reference value method, the best year in terms of performance scores obtained through normalized values is 2022, while for the Boratav-Heterodox approach, it is 2018 for both narrow and broad core approaches. In terms of the Keynesian approach, the worst-performing year according to all other approaches is 2020, while for the Keynesian approach, it is 2018. Based on these results, it has been determined that 2020 is the year with the lowest macroeconomic performance in six out of ten performance scores for the AB27 country group. According to common findings obtained from all these approaches, it was concluded that the biggest impact of the epidemic was the year 2020 and in this year the macroeconomic performances of the countries significantly decreased. However in general countries relatively overcome the economic effects of the epidemic by 2021 and increased their macroeconomic performances. Keywords: Covid-19, European Union, Macroeconomic Performance, Magic Square