SOCIOECONOMIC IMPACT OF THE COVID-19 PANDEMIC AND OF THE RESPONSE POLICY IN MOLDOVA: AN INTERGENERATIONAL PERSPECTIVE BASED ON THE COMPUTABLE GENERAL EQUILIBRIUM MODEL

Valeriu Prohni?chi ()
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Valeriu Prohni?chi: PhD Student, Academy of Economic Studies of Moldova

Economy and Sociology, 2021, issue 2, 6-19

Abstract: The author employs a Computable General Equilibrium (CGE) model calibrated on a Social Accounting Matrix for the Moldovan economy and enhanced with demographic details to answer three questions: 1) what has been the short-term socioeconomic impact of COVID-19, including the distributional ones from the gender and age perspective? 2) how likely were the 2020 policy measures to provide an adequate immediate response to the crisis? and 3) would there exist an alternative, more optimal policy? According to the CGE-based simulation results, cumulative effect of the COVID-19 economic shocks represents around 11% of the Moldovan GDP. All economic sectors are predicted to decline, with transport, HORECA and services to population sectors suffering the heaviest contractions. Transport sector employs predominantly mid-aged men, while the latter two typically employ women. Age- and sex-structure of employment by sectors explain why men aged 25-34 and women aged 15-24 suffer the largest reduction of their wage income (around 10%). Reflecting the income contraction of the breadwinning age categories and reduction in intra-household transfers, children’ consumption declines accordingly. The older generations relying on public pensions are relatively better sheltered against the COVID-19 socioeconomic effects, as pensions remain rather stable. The analysis suggests that the package of measures adopted by Moldovan government has had minor impact, with VAT reduction to HORECA sector having smaller compensatory effect compared to direct payments to infected doctors and labor-related subsidies. A combination of fiscal and structural measures would have provided a socially fairer and economically more efficient response to the crisis.

Keywords: General Computable Equilibrium model; Social Accounting Matrix; macroeconomic policy; policy response; inter-generational transfers; National Transfer Accounts.Àâòîð èñïîëüçóåò ïðèêëàäíóþ ìîäåëü îáùåãî ðàâíîâåñèÿ (ÏÌÎÐ); êàëèáðîâàííóþ íà îñíîâå ìàòðèöû ñîöèàëüíîãî ó÷åòà äëÿ ýêîíîìèêè Ìîëäîâû è äîïîëíåííóþ äåìîãðàôè÷åñêèìè äàííûìè; ÷òîáû îòâåòèòü íà òðè âîïðîñà: 1) êàêîâî áûëî êðàòêîñðî÷íîå ñîöèàëüíî-ýêîíîìè÷åñêîå âîçäåéñòâèå COVID-19 ñ òî÷êè çðåíèÿ ïîëà è âîçðàñòà? 2) íàñêîëüêî âåðîÿòíî; ÷òî ìåðû ïîëèòèêè 2020 ãîäà îáåñïå÷àò àäåêâàòíûé îòâåò íà êðèçèñ? è 3) ñóùåñòâóåò ëè ëó÷øàÿ àëüòåðíàòèâíàÿ ïîëèòèêà? Ìîäåëü ïðåäñêàçûâàåò; ÷òî ñîâîêóïíûé ýôôåêò ýêîíîìè÷åñêèõ ïîòðÿñåíèé; âûçâàííûõ COVID-19; ñîñòàâëÿåò îêîëî 11% ÂÂÏ è ÷òî ñïàä áóäåò âî âñåõ ñåêòîðàõ; íàèáîëåå çàòðîíóòûìè èç êîòîðûõ áóäóò òðàíñïîðò; HORECA (ãîñòèíèöû; ðåñòîðàíû è êàôå) è ñåêòîð óñëóãïðåäîñòàâëÿåìûå íàñåëåíèþ.  òðàíñïîðòíîì ñåêòîðå â îñíîâíîì çàíÿòû ìóæ÷èíû ñðåäíåãî âîçðàñòà; à â äâóõ äðóãèõ -ãëàâíûì îáðàçîì æåíùèí. Âîçðàñòíàÿ è ïîëîâàÿ ñòðóêòóðà çàíÿòîñòè ïî ñåêòîðàì îáúÿñíÿåò; ïî÷åìó ìóæ÷èíû â âîçðàñòå 25-34 ëåò è æåíùèíû â âîçðàñòå 15-24 ëåò ñòðàäàþò îò íàèáîëüøåãî ñíèæåíèÿ çàðàáîòíîé ïëàòû (10%). Îòðàæàÿ ñíèæåíèå äîõîäîâ ýêîíîìè÷åñêè àêòèâíûõ êàòåãîðèé è ñîêðàùåíèå òðàíñôåðòîâ âíóòðè äîìîõîçÿéñòâ; ïîòðåáëåíèå äåòåé ñîîòâåòñòâåííî ñíèæàåòñÿ. Ñòàðøèå ïîêîëåíèÿ; êîòîðûå çàâèñÿò îò ãîñóäàðñòâåííûõ ïåíñèé; îòíîñèòåëüíî ëó÷øå çàùèùåíû îò ñîöèàëüíî-ýêîíîìè÷åñêèõ ïîñëåäñòâèé COVID-19; ïîñêîëüêó ïåíñèè îñòàþòñÿ ñòàáèëüíûìè. Àíàëèç ïîêàçûâàåò; ÷òî ìåðû; ïðèíÿòûå Ïðàâèòåëüñòâîì; îêàçàëè íåçíà÷èòåëüíîå âëèÿíèå; à ñíèæåíèå ÍÄÑ äëÿ ñåêòîðà HORECA èìåëî ìåíüøèé êîìïåíñèðóþùèé ýôôåêò ïî ñðàâíåíèþ ñ ïðÿìûìè âûïëàòàìè èíôèöèðîâàííûì âðà÷àì è ñóáñèäèðîâàíèåì çàíÿòîñòè. Ñî÷åòàíèå ôèñêàëüíûõ è ñòðóêòóðíûõ ìåð îáåñïå÷èëî áû áîëåå ñïðàâåäëèâûé â ñîöèàëüíîì è ýêîíîìè÷åñêîì îòíîøåíèè áîëåå ýôôåêòèâíûé îòâåò íà êðèçèñ.Êëþ÷åâûå ñëîâà: Ïðèêëàäíàÿ ìîäåëü îáùåãî ðàâíîâåñèÿ; Ìàòðèöà ñîöèàëüíîãî ó÷åòà; ìàêðîýêîíîìè÷åñêàÿ ïîëèòèêà; îòâåòíûå ìåðû ïîëèòèêè; ìåæïîêîëåí÷åñêèå òðàíñôåðòû; íàöèîíàëüíûå òðàíñôåðíûå ñ÷åòà.INTRODUCTION The COVID-19 pandemic engendered asystemic impact on the Moldovan economy. Domestic administrative restrictions and external shocks undermined the economic activities and boiled the economic system down. Due do the multifaceted and often opposing changes shocks involved; a net assessment of COVID-19 should account for general equilibrium effects. Computable General Equilibrium (CGE) models are particularly useful for undertaking such system-wide analyses. They consistently account for all changes in prices and quantities that shocks trigger in all markets. COVID-19 may have also involved significant distributional effects; as the crisis did not equally hit all economic sectors and; implicitly; all generations. It is thus of practical policy importance to understand which economic sectors and social groups may have been hit particularly hard by the crisis and to assess if the immediate policy measures offered a meaningful response to the crisis. If not; what combination of policy tools would have suited this purpose better? To address these questions; we employ a CGE model calibrated on a Moldovan Social Accounting Matrix augmented with demographic details. (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:aat:journl:y:2021:i:2:p:6-19

DOI: 10.36004/nier.es.2021.2-01

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