Do COVID-19 Lock-Downs Affect Business Cycle? Analysis Using Energy Consumption Cycle Clock for Selected European Countries

On 11 March 2020, the WHO declared the COVID-19 epidemic to be a global pandemic. This was a consequence of the rapid increase in the number of people with positive test results, the increase in deaths due to COVID-19, and the lack of pharmaceutical drugs. Governments introduced national lockdowns, which have impacted both energy consumption and economies. The purpose of this paper is to answer the following question: do COVID-19 lockdowns affect the business cycle? We used the cycle clock approach to assess the magnitude of decrease in electricity consumption in the three waves of the epidemic, namely, April 2020, November 2021, and April 2021. Additionally, we checked the relation between energy consumption and GDP by means of spectral analysis. Results for selected 28 European countries confirm an impact of the introduced non-pharmaceutical interventions on both energy consumption and business cycle. The reduction of restrictions in subsequent pandemic waves increased electricity consumption, which suggests movement out of the economic recession.