There has been considerable public debate about whether the economic impact
of the current COVID19 restrictions are worth the costs. Although the potential
impact of COVID19 has been modelled extensively, very few numbers have been
presented in the discussions about potential economic impacts. For a good
answer to the question – will the restrictions cause as much harm as COVID19? –
credible evidence-based estimates are required, rather than simply rhetoric.
Here we provide some preliminary estimates to compare the impact of the current
restrictions against the direct impact of the virus. Since most countries are
currently taking an approach that reduces the number of COVID19 deaths, the
estimates we provide for deaths from COVID19 are deliberately taken from the
low end of the estimates of the infection fatality rate, while estimates for
deaths from an economic recession...
Presented here is a simplified mathematical model describing a supply side crisis caused by the coronavirus pandemic (COVID – 19). Model of a single-product economy is presented where the supply shock has a constant acceleration. If amount of the supply shock has a modest positive acceleration the product earnings are positive and increasing with the passage of time. We observe an economic growth. If amount of the supply shock has a large positive acceleration the product earnings are negative and decreasing with the passage of time. We observe an economic decline. If amount of the supply shock has a negative acceleration the product earnings are negative and decreasing with the passage of time. We observe an economic decline. Economic mechanism of the supply side crisis is conceptually close to a mechanism of economic growth caused by investment. Moreover, economic system is able...
During the COVID-19 crisis there have been many difficult decisions
governments and other decision makers had to make. E.g. do we go for a total
lock down or keep schools open? How many people and which people should be
tested? Although there are many good models from e.g. epidemiologists on the
spread of the virus under certain conditions, these models do not directly
translate into the interventions that can be taken by government. Neither can
these models contribute to understand the economic and/or social consequences
of the interventions. However, effective and sustainable solutions need to take
into account this combination of factors. In this paper, we propose an
agent-based social simulation tool, ASSOCC, that supports decision makers
understand possible consequences of policy interventions, bu exploring the
combined social, health and economic consequences of...
The objective of our study is to conduct and accomplish a retrospective analysis of the macro-economic repercussions of the various Pandemics which have emerged till date and also to forecast the impact of COVID-19 on the Indian Economy. COVID-19 is a contagious disease belonging to the SARS COV-2 family. The best method recommended to restrain the virus is by social distancing and self-isolation. The major method being used by infected countries is complete lock down. This method may help in containing the virus spread but it is paving the way to the Global recession which will have a severe consequence on all sectors of the economy and all the countries-be it developed or developing. We also suggest that additional work is necessary to develop a more comprehensive macro-economic model in order to accurately estimate the relative cost and effects of a global response to the...
Covid-19 induced job losses occurred predominantly in industries with intensive worker-client interaction as well as in pink-collar and blue-collar occupations. We study the ability of fiscal policy to stabilize employment by occupation and industry during the Covid-19 crisis. We use a multi-sector, multi-occupation macroeconomic model and investigate different fiscal policy instruments that help the economy recover faster. We show that fiscal stimuli foster job growth for hard-hit pink-collar workers, whereas stimulating blue-collar job creation is more challenging. A cut in labor taxes performs best in stabilizing total employment and the employment composition.
The Covid-19 pandemic has motivated a myriad of studies and proposals on how economic policy should respond to this colossal shock. But participants in this debate seldom recognize that the health shock is not entirely exogenous. Its magnitude and dynamics themselves depend on economic policies, and the explicit or implicit incentives those policies provide. To illuminate the feedback loops between medical and economic factors we develop a minimal economic model of pandemics. In the model, as in reality, individual decisions to comply (or not) with virus-related public health directives depend on economic variables and incentives, which themselves respond to current economic policy and expectations of future policies. The analysis yields several practical lessons: because policies affect the speed of virus transmission via incentives, public health measures and economic policies can...
Since the coronavirus outbreak began in January, Chinese business activity has been severely slowed, affecting China’s position in the global industrial supply chain. The Enterprise Survey for Innovation and Entrepreneurship in China (ESIEC) launched a survey on the “condition of micro, small and medium-sized enterprises (SMEs) amidst the coronavirus outbreak.” Our surveyors then conducted follow-up interviews with a representative sample of private entrepreneurs from a database maintained over the past three years, asking about the resumption of production as well the different challenges enterprises face. Our findings include: