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The COVID-19 pandemic: theoretical scenarios of its socioeconomic impacts in Latin America and the Caribbean

Author

Listed:
  • Cintya Lanchimbra
  • Andrea Bonilla-Bolaños
  • Juan Pablo Díaz-Sánchez

Abstract

This paper provides some theoretical scenarios the socioeconomic impacts caused by the COVID-19 pandemic for the Latin America and the Caribbean (LAC). To do so, after a brief literature review of previous pandemics, we use the macro and microeconomic theory, together with aggregated data, in order to provide expected implications of the COVID-19 pandemic for the LAC region. At a macroeconomic level, we explain how the COVID-19 shock is causing both aggregate supply and aggregate demand to reduce so plunging the region into a recession and why such a recession is dangerously harmful for the LAC economies. At a micro level, we describe why some enterprises would adapt to remain in the market or even growth; by contrast, some of them would leave the market in the short term. For the consumers, the impact of this sanitary crisis is related to the change in their preferences and household members’ relations due to extended quarantines. JEL Classification: D10; D20; D84; E10; F22.

Suggested Citation

  • Cintya Lanchimbra & Andrea Bonilla-Bolaños & Juan Pablo Díaz-Sánchez, 2020. "The COVID-19 pandemic: theoretical scenarios of its socioeconomic impacts in Latin America and the Caribbean," Brazilian Journal of Political Economy, Center of Political Economy, vol. 40(4), pages 622-646.
    • Handle: RePEc:ekm:repojs:v:40:y:2020:i:4:p:622-646:id:2077
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    More about this item

    Keywords

    Latin America and the Caribbean; COVID-19; socioeconomic implications;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D20 - Microeconomics - - Production and Organizations - - - General
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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