The Impacts of the Coronavirus on the Economy of the United States (original) (raw)
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Impacts on the U.S. Macroeconomy of Mandatory Business Closures in Response to the COVID-19 Pandemic
SSRN Electronic Journal, 2020
We estimate the macroeconomic impacts of mandatory business closures in the U.S. and many other countries in order to control the spread of the COVID-19. The analysis is based on the application of a modified version of the GTAP model. We simulate mandatory closures in all countries or parts of countries that had imposed them as of 7 April for three-month and sixmonth cases. For the three-month scenario, we estimate a 20.3% decline of U.S. GDP on an annual basis, or $4.3 trillion. The employment decline of 22.4% in the U.S. for the three-month closure represents 35.2 million workers for that period. If the mandatory closures are extended to six months because of a second wave, these negative impacts would slightly more than double. The employment impacts are slightly greater in percentage terms than the GDP impacts because most service sectors, which are generally more labour-intensive, are more negatively impacted by the closures than are 'essential' sectors. Our results should be considered upper-bound estimates given such assumptions as businesses laying off workers no longer paying them wages or salaries. Note also that the article examines the mandatory closures alone and does not factor in any countervailing fiscal or monetary policies.
Macroeconomic consequences of the COVID-19 pandemic
Economic Modelling
We estimate the economic impacts of COVID-19 in the U.S. using a disaster economic consequence analysis framework implemented by a dynamic computable general equilibrium (CGE) model. This facilitates identification of relative influences of several causal factors as "shocks" to the model, including mandatory business closures, disease spread trajectories, behavioral responses, resilience, pent-up demand, and government stimulus packages. The analysis is grounded in primary data on avoidance behavior and healthcare parameters. The decomposition of the influence of various causal factors will help policymakers offset the negative influences and reinforce the positive ones during the remainder of this pandemic and future ones.
COVID-19 and the economy: job loss and economic shutdown
Medical Research Journal, 2021
The COVID-19 pandemic devastated several countries across the globe, having economic, social, and health impacts on all nations, some more than others with over 31 million infection cases and almost 1 million deaths as a result of the pandemic. This has caused a ripple effect on the agricultural sector as seen by the food scarcity and the increase in food spoilage ravaging the sector as many local farmers are unable to transport their produce to consumers. The pandemic has also confronted the hospitality industry with an unprecedented challenge as a result of the temporary closure they had to experience due to the lockdown imposed in affected countries. The transport sector is not excluded though to the positive side as there has been a decrease in air pollution within some countries due to the various travel restrictions and bans placed on the movement of people. Another sector seriously hit by the pandemic is the tourism sector as there has been a projected loss of about $1.2 trillion equivalent to 1.5% of the global Gross Domestic Product (GDP). The same goes for the sports sector as major tournaments have either been cancelled or postponed. This paper discusses the impact of COVID-19 on the global economy and its corresponding implication on job loss in various sectors. With the daily increase in the number of infected cases globally, systems and structures which will be able to neutralize the effects of future pandemics need to be put in place and reviewed from time to time.
Re-opening after the lockdown: Long-run aggregate and distributional consequences of COVID-19
Journal of Mathematical Economics, 2021
Covid-19 has dealt a devastating blow to productivity and economic growth. We employ a general equilibrium framework with heterogeneous agents to identify the tradeoffs involved in restoring the economy to its pre-Covid-19 state. Several tradeoffs, both over time, and between key economic variables, are identified, with the feasible speed of successful reopening being constrained by the transmission of the infection. In particular, while more rapid opening up of the economy will reduce short-run aggregate output losses, it will cause larger long-run output losses, which potentially may be quite substantial if the opening is overly rapid and the virus is not eradicated. More rapid opening of the economy mitigates the increases in both long-run wealth and income inequality, thus highlighting a direct conflict between the adverse effects on aggregate output and its distributional consequences.
Covid-19 And Its Aftermath on The Economy
International Journal of Scientific Research in Science and Technology, 2020
The COVID-19 pandemic is having a “severe” footprint on the economy of the world. In the study the heed is on gauging the impact on different areas such as hospitality, auto, real estate, aviation & tourism, Gross domestic product (GDP), unemployment, different shapes of recoveries in the economy and also explained some measures for stabilizing the economy. The economic effect of COVID-19 has been considerable and broad based. The GDP goes down dramatically in 2020 Q1 (-23.9% annually) due to the unprecedented lockdown to control the spread of COVID-19. Thus, in the informal sectors and daily wage people have been at the most risk .Approximately, 25 million jobs could be lost throughout the world due to corona virus pandemic, but an internationally coordinated policy reaction can help underneath the impact on global unemployment, as happened in the global financial crisis of 2008-2009, according to UN agency. This is an opportunity for our country to become a part of global supply chain for the enhancement of GDP. On the basis of some measures, we overcome these unpropitious situations.
Frontiers in Applied Mathematics and Statistics, 2020
The sudden onset of the coronavirus (SARS-CoV-2) pandemic has resulted in tremendous loss of human life and economy in more than 210 countries and territories around the world. While self-protections such as wearing masks, sheltering in place and quarantine policies and strategies are necessary for containing virus transmission, tens of millions of people in the U.S. have lost their jobs due to the shutdown of businesses. Therefore, how to reopen the economy safely while the virus is still circulating in population has become a problem of significant concern and importance to elected leaders and business executives. In this study, mathematical modeling is employed to quantify the profit generation and the infection risk simultaneously from the point of view of a business entity. Specifically, an ordinary differential equation model was developed to characterize disease transmission and infection risk. An algebraic equation is proposed to determine the net profit that a business entity can generate after reopening and take into account the costs associated of several protection/quarantine guidelines. All model parameters were calibrated based on various data and information sources. Sensitivity analyses and case studies were performed to illustrate the use of the model in practice.
CoVid-19 is an ongoing global outbreak of coronavirus disease 2019, an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The World Health Organization (WHO) declared the outbreak a Public Health Emergency of International Concern on January 30, 2020; and a pandemic on March 11, 2020. Several mitigation measures have been used in attempts to limit the spread of the virus, including mandatory wearing of masks in public; bans on unnecessary travel; and the closure of non-essential businesses. This paper defines a lockdown as the closure of non-essential businesses combined with requirements that all citizens stay at home except for grocery shopping, trips to a pharmacy, and medical appointments. The effectiveness of lockdowns is controversial. Proponents tend to argue that lockdowns would have been more effective if enforcement had been increased and if lockdowns had been extended for a longer period of time. Opponents have argued that lockdowns hurt the economy, hurt children, and have had little positive effect on public health. The paper addresses the economic effect of CoVid-19 lockdowns in the United States using a Benefit/Cost Analysis (BCA) framework. Two separate analyses are provided: a traditional BCA analysis, which assumes that the value of life is constant regardless of age; and a Preferred Analysis, which adjusts the number of deaths, and values the economic cost of the deaths based on the age of the deceased.
The cost of business restrictions during the COVID-19 pandemic
F1000Research
Background: In addition to reducing mortality and morbidity, COVID-19 therapies confer societal benefits by reducing the disease’s economic impact. Therapies that address COVID hospitalizations mitigate the need for government-imposed economic restrictions to reduce disease spread and hence the risk that hospitals become overwhelmed. We investigated the potential value of such therapies by estimating the cost of government restrictions imposed during late 2020, costs that COVID therapies might make less necessary. Methods: We combined high frequency consumer spending and initial unemployment claims data (outcomes), information about when state governments restricted business activities (explanatory variable of interest), and case incidence and mortality data (proxies for the potential confounding effect of pandemic severity on voluntary economic activity reductions). We developed linear mixed models that account for nesting within US state and correlation across observations cl...
Habits and Demand Changes after COVID-19
Public Health Policy eJournal, 2021
In this paper, we investigate how the COVID-19 pandemics and more precisely the lockdown of a sector of the economy may have changed our habits and, therefore, altered the demand of some goods even after the re-opening. In a two-sector infinite horizon economy, we show that the demand of the goods produced by the sector closed during the lockdown could shrink or expand with respect to their prepandemic level depending on the length of the lockdown and the relative strength of the satiation effect and the substitutability effect. We also provide conditions under which this sector could remain inactive even after the lockdown as well as an insight on the policy which should be adopted to avoid this outcome.