Supply-side Effects of Pandemic Mortality: Insights from an Overlapping-generations Model

Etienne Gagnon, Johannsen Benjamin K. () and López-Salido David ()
Additional contact information
Johannsen Benjamin K.: Federal Reserve Board, 20th Street and Constitution Avenue NW, Washington, DC, 20551, USA
López-Salido David: Federal Reserve Board, 20th Street and Constitution Avenue NW, Washington, DC, 20551, USA

The B.E. Journal of Macroeconomics, 2022, vol. 22, issue 1, 1-21

Abstract: We use an overlapping-generations model to explore the implications of mortality during pandemics for the economy’s productive capacity. Under current epidemiological projections for the progression of COVID-19, our model suggests that mortality will have, in itself, only small effects on output and factor prices because projected mortality is small in proportion to the population and skewed toward individuals who are retired from the labor force. That said, we show that if the spread of COVID-19 is not contained, or if the ongoing pandemic were to follow a mortality pattern similar to the 1918–1920 Great Influenza pandemic, then the effects on the productive capacity would be economically significant and persist for decades.

Keywords: pandemics; potential output; real wage; equilibrium real interest rate; demographics (search for similar items in EconPapers)
JEL-codes: E21 E27 E43 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/bejm-2020-0196 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
Working Paper: Supply-Side Effects of Pandemic Mortality: Insights from an Overlapping-Generations Model (2020)
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:bpj:bejmac:v:22:y:2022:i:1:p:1-21:n:4

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/bejm/html

DOI: 10.1515/bejm-2020-0196

Access Statistics for this article

The B.E. Journal of Macroeconomics is currently edited by Arpad Abraham and Tiago Cavalcanti

More articles in The B.E. Journal of Macroeconomics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().