Coping with seasonality in a quarterly CGE model: COVID-19 and U.S. agriculture

Peter Dixon and Maureen Rimmer

Centre of Policy Studies/IMPACT Centre Working Papers from Victoria University, Centre of Policy Studies/IMPACT Centre

Abstract: Most dynamic CGE models work with periods of one year. This limits their applicability for analyzing the effects of shocks that operate over a short period or with different intensities through a year. It is relatively easy to convert an annual CGE model to shorter periodicity, for example a quarter, if we ignore seasonal differences in the pattern of economic activity. But this is not acceptable for agriculture. This paper introduces seasonal factors to the agricultural specification in a detailed quarterly CGE model of the U.S. The model is then applied to analyze the effects of the COVID pandemic on U.S. farm industries. Taking account of the general features of the pandemic such as the reduction in household spending, we find that these effects are mild relative to the effects on most other industries. However, agriculture is subject to potential supply-chain disruptions. We apply our quarterly model to analyze two such possibilities: loss of labour at harvest time in Fruit & nut farms; and temporary closure of meat-processing plants. We find that these disruptions are unlikely to cause noticeable reductions in the supply of food products to U.S. households.

Keywords: Quarterly CGE modelling; seasonal factors in agriculture; COVID pandemic; supply-chain disruption; U S agriculture (search for similar items in EconPapers)
JEL-codes: C68 I19 Q11 (search for similar items in EconPapers)
Date: 2021-01
New Economics Papers: this item is included in nep-agr and nep-cmp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Journal Article: Coping with seasonality in a quarterly CGE model: COVID‐19 and U.S. agriculture (2021)
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