Spatial Spillover Effects of Mega-City Lockdown Due to Covid-19 Outbreak: Evidence from Turkey

With the Covid-19 outbreak, academic studies have been started to calculate the economic effects of the outbreak. Since it is not possible to determine when epidemics/pandemics (or large magnitude earthquakes, etc.) occur, their negative economic effects cannot be precisely predicted. Decreasing consumption and supply at the same time, breaking the supply chain, closing businesses and increasing unemployment are rapidly disrupting economic conditions. The measures are mostly related to issues at the macroeconomic level. If a full curfew is imposed throughout the country, economists are working on how it will have an impact on the economy of the whole country. However, the analysis of the effects at the regional level is discussed secondarily. The aim of this study is to simulate the effects of an economic lock-down that might take place in two important mega cities such as Istanbul and Izmir. As a result of this analysis made using spatial econometrics tools; in the event of a lockdown (or earthquake) in mega cities such as İstanbul and/or İzmir, there will be major economic difficulties that will spread wave by wave to the neighbouring cities and then eventually to the whole country.