The Impact of COVID-19 Shocks on Business and GDP of Global Economy

Reza Gharoie Ahangar and Myungsup Kim
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Reza Gharoie Ahangar: Lewis University
Myungsup Kim: University of North Texas

American Business Review, 2022, vol. 25, issue 2, 328-354

Abstract: This study examines the relationship between COVID-19 shocks and GDP loss of different countries worldwide based on the seven scenarios of the epidemiological DSGE/CGE model of [McKibbin, W., & Fernando, R. (2020). The Global Macroeconomic Impacts of COVID-19: Seven Scenarios. Asian Economic Papers, 20(2): 1-30, MIT Press]. We implemented a panel data approach for 24 cross-sectional units with three periods and a general regression neural network. The economic and financial shocks consist of labor supply, equity risk premium, consumption demand, and government expenditure. The findings show that the consumption demand and equity risk premium shocks on GDP are more influential than the other shocks. Moreover, the results reveal that the most significant GDP loss is associated with Japan, Germany, and the US, respectively, which are industrialized countries with the most prominent automobile manufacturers. The lowest GDP loss is linked to Saudi Arabia, one of the world's biggest oil producer countries.

Keywords: COVID-19; Economic Shocks; GDP Loss; Global Business (search for similar items in EconPapers)
JEL-codes: C33 C53 C63 F47 (search for similar items in EconPapers)
Date: 2022
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