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The Global Macroeconomic Impacts of COVID-19: Seven Scenarios

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  • Warwick McKibbin

    (Crawford School of Public Policy Australian National University Room 3.58, Crawford Building 132, Lennox Crossing The Australian National University Acton ACT 2601 Australia Brookings Institution Washington, DC and ARC Centre of Excellence in Population Ageing Research (CEPAR) Australia)

  • Roshen Fernando

    (Crawford School of Public Policy The Australian National University and ARC Centre of Excellence in Population Ageing Research (CEPAR))

Abstract

COVID-19 has disrupted the Chinese economy and is spreading globally. The evolution of the disease and its economic impacts are highly uncertain, making formulation of appropriate macroeconomic policy responses challenging. This paper explores seven plausible scenarios of COVID-19 and the macroeconomic outcomes using a global hybrid DSGE/CGE general equilibrium model. The results demonstrate that even a contained outbreak could significantly impact the global economy in the short run. Economic costs could be significantly avoided with greater investment in public health systems in all economies, particularly in economies where health care systems are less developed and population density is high.

Suggested Citation

  • Warwick McKibbin & Roshen Fernando, 2021. "The Global Macroeconomic Impacts of COVID-19: Seven Scenarios," Asian Economic Papers, MIT Press, vol. 20(2), pages 1-30, Summer.
  • Handle: RePEc:tpr:asiaec:v:20:y:2021:i:2:p:1-30
    DOI: 10.1162/asep_a_00796
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