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The uneven economic consequences of COVID 19: A structural analysis

Martin Kuncl, Austin McWhirter and Alexander Ueberfeldt

No 2021-17, Staff Analytical Notes from Bank of Canada

Keywords: The COVID-19 shock had severe economic implications; which were unequally distributed across Canadian households and businesses. Using a structural model with wealth; housing and income differences across households; we create a scenario that mimics key aggregate economic consequences of the COVID-19 shock. We find the following:•The uneven shock consequences—in particular; higher unemployment risk faced by young households during the COVID-19 pandemic—amplified the negative implications for the macroeconomy; household vulnerabilities and consumption inequality. •Government support programs stimulated the economy and reduced consumption inequality and medium-term household vulnerabilities.•A stronger monetary policy response completely offsetting the effective lower bound constraint would have had positive implications for output; inequality and medium-term vulnerabilities. (search for similar items in EconPapers)
JEL-codes: E20 E52 E62 (search for similar items in EconPapers)
Date: 2021-08
New Economics Papers: this item is included in nep-dge, nep-isf and nep-mac
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Handle: RePEc:bca:bocsan:21-17