The impacts of COVID-19 containment on the Australian economy and its agricultural and mining industries

Janine M. Dixon, Philip D. Adams and Nicholas Sheard

Australian Journal of Agricultural and Resource Economics, 2021, vol. 65, issue 04

Abstract: We simulate the economic impacts of the COVID-19 pandemic on the Australian economy using VURM, a detailed computable general equilibrium model for Australia. We identify five sources of economic perturbations: changes to productivity due to changing work practices, changes in household demand imposed by voluntary and mandated social distancing behaviour, changes in international trade due to a weakened world economy and severe curtailment of international travel, reduced population growth due to lower net migration and large debt-financed fiscal stimulus. Variants of these shocks and associated recovery paths are simulated in VURM, with three scenarios describing potential recovery arcs. The macroeconomic and industry impacts are reported for each scenario. Ultimately, our focus is on the impact on output and employment in the agriculture and mining sectors, and on their likely recovery prospects. At the peak of economic impacts, output in these sectors declines by about 6 per cent relative to a no-COVID baseline. Compared to the economy-wide average, the decline in agriculture and mining output is small. This can be explained by relatively minor impacts on work practices, relatively low negative impacts on demand for intensive agriculture (helped by fiscal supports for households) and relatively low disruption to export demand.

Keywords: Consumer/Household Economics; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/342979/files/T ... 19%20containment.pdf (application/pdf)

Related works:
Journal Article: The impacts of COVID‐19 containment on the Australian economy and its agricultural and mining industries (2021)
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:ags:aareaj:342979

DOI: 10.22004/ag.econ.342979

Access Statistics for this article

More articles in Australian Journal of Agricultural and Resource Economics from Australian Agricultural and Resource Economics Society Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().