Impacts of the Substitutability of Consumption on Infection Dynamics

Shin Fukuda
Additional contact information
Shin Fukuda: Komazawa University, Japan.

International Journal of Economics and Financial Issues, 2023, vol. 13, issue 4, 8-14

Abstract: In this study, we construct a dynamic stochastic general equilibrium (DSGE) model to examine the impacts of infectious diseases on consumption dynamics. Assuming a model that considers the substitutability of consumption, we show that the slump in demand for consumption goods will be low in high-substitutability economy. Further, we show that immediate lockdown implementation upon the emergence of an epidemic can lead to a significant reduction in consumption, as well as alleviate the persistent stagnation of consumption, Although the analysis model in this study is simple, it reproduces the situations in United States and Japan, and it could be said that the impact of contingent policies, such as lockdown, has already been confirmed in Taiwan and New Zealand.

Keywords: Consumption substitutability; COVID-19; Lockdown; DSGE model (search for similar items in EconPapers)
JEL-codes: E21 E32 E65 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econjournals.com/index.php/ijefi/article/download/14445/7351 (application/pdf)
https://www.econjournals.com/index.php/ijefi/article/view/14445 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eco:journ1:2023-04-2

Ordering information: This journal article can be ordered from
https://econjournals.com/index.php/ijefi

Access Statistics for this article

More articles in International Journal of Economics and Financial Issues from International Journal of Economics and Financial Issues
Bibliographic data for series maintained by Monica Sinhat ().