The economic impact of COVID-19

Warwick McKibbin, Roshen Fernando

    Research output: Chapter in Book/Report/Conference proceedingChapter

    Abstract

    The outbreak of coronavirus named COVID-19 has disrupted the Chinese economy and is spreading globally. The evolution of the disease and its economic impact is highly uncertain which makes it difficult for policymakers to formulate an appropriate macroeconomic policy response. In order to better understand possible economic outcomes, this paper explores seven different scenarios of how COVID-19 might evolve in the coming year using a modelling technique developed by Lee and McKibbin (2003) and extended by McKibbin and Sidorenko (2006). It examines the impacts of different scenarios on macroeconomic outcomes and financial markets in a global hybrid DSGE/CGE general equilibrium model. The scenarios in this paper demonstrate that even a contained outbreak could significantly impact the global economy in the short run. These scenarios demonstrate the scale of costs that might be avoided by greater investment in public health systems in all economies but particularly in less developed economies where health care systems are less developed and popultion density is high.
    Original languageEnglish
    Title of host publicationEconomics in the Time of COVID-19
    Editors Richard Baldwin & Beatrice Weder di Mauro
    Place of PublicationLondon
    PublisherCEPR Press
    Pages45-51
    Edition1st
    ISBN (Print)978-1-912179-28-2
    DOIs
    Publication statusPublished - 2020

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