The Global Macroeconomic Impacts of COVID-19: Seven Scenarios

Warwick McKibbin, Roshen Fernando

    Research output: Contribution to specialist publicationGeneral Article

    Abstract

    The outbreak of Coronavirus named COVID-19 world 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 population density is high.
    Original languageEnglish
    Pages116-156
    Number of pages41
    Volume10
    Specialist publicationCovid Economics
    Publication statusPublished - 27 Apr 2020

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