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Impact of COVID-19 on the Economic Output of the US Outbreak’s Epicenter

Orkideh Gharehgozli (), Peyman Nayebvali (), Amir Gharehgozli () and Zaman Zamanian ()
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Orkideh Gharehgozli: Montclair State University
Peyman Nayebvali: Columbia University
Amir Gharehgozli: California State University
Zaman Zamanian: Montclair State University

Economics of Disasters and Climate Change, 2020, vol. 4, issue 3, No 7, 573 pages

Abstract: Abstract Coronavirus disease of 2019 (COVID-19) started in December 2019 in Wuhan, China. In a few months, it has become a pandemic with devastating consequences for the global economy. By the end of June, with almost 2.6 million confirmed COVID-19 cases, United States is above other countries in the rankings. Furthermore, New York with more than 416 thousand cases is the epicenter of outbreak in the US and had more cases than any other countries in the world until first half of June. In this paper, we use a two-step Vector Auto Regressive (VAR) model to forecast the effect of the virus outbreak on the economic output of the New York state. In our model, we forecast the effect of the shutdown on New York’s Gross Domestic Product (GDP) working with Unemployment Insurance Claim series representing a workforce factor, as well as the Metropolitan Transportation Authority (MTA) ridership data indicating the economic activity. We predict annualized quarterly growth rate of real GDP to be between -3.99 to -4.299% for the first quarter and between -19.79 to -21.67% for the second quarter of 2020.

Keywords: Forecast; Time series; Vector auto regressive; Gross domestic product; Unemployment insurance claim; COVID-19 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s41885-020-00069-w

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