Beyond GDP : COVID-19's effects on macroeconomic efficiency and productivity dynamics in OECD countries

The COVID-19 pandemic triggered unprecedented economic disruptions, raising critical questions about the resilience and adaptability of macroeconomic productivity across countries. This study examines the impact of COVID-19 on macroeconomic efficiency and productivity dynamics in 37 OECD countries using quarterly data from 2018Q1 to 2024Q4. By employing a Slack-Based Measure Data Envelopment Analysis (SBM-DEA) and the Malmquist Productivity Index (MPI), we decompose total factor productivity (TFP) into efficiency change (EC) and technological change (TC) across three periods: pre-pandemic, during-pandemic, and post-pandemic. Our framework incorporates both desirable (GDP) and undesirable outputs (inflation, unemployment, housing price inflation, and interest rate distortions), offering a multidimensional view of macroeconomic efficiency. Results show broad but uneven productivity gains, with technological progress proving more resilient than efficiency during the pandemic. Post-COVID recovery trajectories diverged, reflecting differences in structural adaptability and innovation capacity. Regression analysis reveals that stringent lockdowns in 2020 were associated with lower productivity in 2023-2024, while more adaptive policies in 2021 supported long-term technological gains. These findings highlight the importance of aligning crisis response with forward-looking economic strategies and demonstrate the value of DEA-based methods for evaluating macroeconomic performance beyond GDP.