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The Macroeconomics of the Covid-19 Epidemic: The Case of China

Author

Listed:
  • Peng, Tao

    (Southwestern University of Finance and Economics)

  • Chan , Ying Tung

    (Beijing Normal University)

  • Minetti, Raoul

    (Michigan State University, Department of Economics)

Abstract

This paper studies the impacts of the Covid-19 epidemic on economic and health outcomes in China from January 20 to September 28, 2020. We first document the outbreak and the decline of the epidemic and the containment policies implemented in China during this period. We then use a SIR-Macro model to study the macroeconomic and health outcomes of the epidemic. Our model can generate the infection and death dynamics broadly consistent with the data and the U-shaped recovery of the Chinese economy at the weekly frequency. Our paper demonstrates that both the containment policies and the resilience of the society play important roles in fighting the epidemic.

Suggested Citation

  • Peng, Tao & Chan , Ying Tung & Minetti, Raoul, 2023. "The Macroeconomics of the Covid-19 Epidemic: The Case of China," Working Papers 2023-2, Michigan State University, Department of Economics.
    • Handle: RePEc:ris:msuecw:2023_002
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    References listed on IDEAS

    as
    1. Glover, Andrew & Heathcote, Jonathan & Krueger, Dirk, 2022. "Optimal age-Based vaccination and economic mitigation policies for the second phase of the covid-19 pandemic," Journal of Economic Dynamics and Control, Elsevier, vol. 140(C).
    2. Facundo Piguillem & Liyan Shi, 2022. "Optimal Covid-19 Quarantine and Testing Policies," The Economic Journal, Royal Economic Society, vol. 132(647), pages 2534-2562.
    3. Moll, Benjamin & Kaplan, Greg & Violante, Giovanni, 2020. "The Great Lockdown and the Big Stimulus: Tracing the Pandemic Possibility Frontier for the U.S," CEPR Discussion Papers 15256, C.E.P.R. Discussion Papers.
    4. Daron Acemoglu & Victor Chernozhukov & Iván Werning & Michael D. Whinston, 2021. "Optimal Targeted Lockdowns in a Multigroup SIR Model," American Economic Review: Insights, American Economic Association, vol. 3(4), pages 487-502, December.
    5. Andrew Atkeson, 2020. "What Will be the Economic Impact of COVID-19 in the US? Rough Estimates of Disease Scenarios," Staff Report 595, Federal Reserve Bank of Minneapolis.
    6. Faria-e-Castro, Miguel, 2021. "Fiscal policy during a pandemic," Journal of Economic Dynamics and Control, Elsevier, vol. 125(C).
    7. Zhao, Bo, 2020. "COVID-19 pandemic, health risks, and economic consequences: Evidence from China," China Economic Review, Elsevier, vol. 64(C).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Covid-19; containment policies; digital economy; resilience of the society;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • I10 - Health, Education, and Welfare - - Health - - - General

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