The Interplay between COVID-19 and the Economy in Canada

Vinicius Albani, Matheus Grasselli, Weijie Pang and Jorge P. Zubelli
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Vinicius Albani: Department of Mathematics, Federal University of Santa Catarina, Florianópolis 88040-900, Brazil
Matheus Grasselli: Department of Mathematics and Statistics, McMaster University, Hamilton, ON L8S 4K1, Canada
Weijie Pang: School of Computing and Data Science, Wentworth Institute of Technology, Boston, MA 02115, USA
Jorge P. Zubelli: Mathematics Department, Khalifa University, Abu Dhabi 127788, United Arab Emirates

JRFM, 2022, vol. 15, issue 10, 1-26

Abstract: We propose a generalized susceptible-exposed-infected-removed (SEIR) model to track COVID-19 in Canadian provinces, taking into account the impact of the pandemics on unemployment. The model is based on a network representing provinces, where the contact between individuals from different locations is defined by a data-driven mixing matrix. Moreover, we use time-dependent parameters to account for the dynamical evolution of the disease incidence, as well as changes in the rates of hospitalization, intensive care unit (ICU) admission, and death. Unemployment is accounted for as a reduction in the social interaction, which translates into smaller transmission parameters. Conversely, the model assumes that higher proportions of infected individuals reduce overall economic activity and therefore increase unemployment. We tested the model using publicly available sources and found that it is able to reproduce the reported data with remarkable in-sample accuracy. We also tested the model’s ability to make short-term out-of-sample forecasts and found it very satisfactory, except in periods of rapid changes in behavior. Finally, we present long-term predictions for both epidemiological and economic variables under several future vaccination scenarios.

Keywords: COVID-19 modeling; economic impact; unemployment dynamics; Okun’s law (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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