Teaching the Economic Impact of COVID-19 with a Simple Short-run Macro-model: Simultaneous Supply and Demand Shocks

Sebastien Charles, Thomas Dallery and Jonathan Marie

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Abstract: This short note has one main ambition. It seeks to provide students with a very simple macroeconomic framework to deal with the short-term economic impact of the COVID-19 pandemic. The explanation for the unprecedented magnitude of the recession over a short span of time is to be found in the peculiar form of the shock due to the various lockdowns. Indeed, the 2020 crisis is specific in that it involved two recessive shocks simultaneously: a demand shock superimposed on a supply shock. This model is original in that although it is driven by demand it is capable of dealing with supply issues without entailing any additional technical difficulties.

Keywords: Covid 19; Lockdown; recession; simultaneous shocks (search for similar items in EconPapers)
Date: 2021
Note: View the original document on HAL open archive server: https://hal.science/hal-03201132v1
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Published in Review of Political Economy, 2021, 33 (3), pp.462-479. ⟨10.1080/09538259.2021.1893045⟩

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Journal Article: Teaching the Economic Impact of COVID-19 with a Simple Short-run Macro-model: Simultaneous Supply and Demand Shocks (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03201132

DOI: 10.1080/09538259.2021.1893045

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