Recession and Recovery of the Pandemic

Lester Hunt, Anqi Zhang and Shuonan Zhang
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Anqi Zhang: Fudan University

No 2022-05, Working Papers in Economics & Finance from University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group

Abstract: We develop an SIR-macroeconomic model with virus detection and inequality to study their implications for economic and health consequences during a pandemic crisis. We find a two-way relationship between the pandemic recession and inequality that exacerbate each other although such a vicious circle could be broken by accurate and extensive testing. This mitigation effect can be improved given complementary arrangements such as social protection. The extensive virus detection could not only be a better alternative intervention to lock-down to break the “life-or-economy” trade-off, but also prevent the economy to be permanently damaged if there is reinfection.

Keywords: COVID-19; SIR-macro model; testing; inequality (search for similar items in EconPapers)
JEL-codes: E1 H0 I1 (search for similar items in EconPapers)
Pages: 30
Date: 2022-06-21
New Economics Papers: this item is included in nep-dem, nep-hea and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:pbs:ecofin:2022-05

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