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The Hit of the Novel Coronavirus Outbreak to China's Economy

Hongbo Duan, Qin Bao, Kailan Tian, Shouyang Wang, Cuihong Yang and Zongwu Cai
Additional contact information
Hongbo Duan: School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China
Qin Bao: Center for Forecasting Science, Chinese Academy of Sciences, Beijing 100190, China
Kailan Tian: Faculty of Economics and Business, University of Groningen, 9700 AV Groningen, The Netherlands
Shouyang Wang: School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China and Center for Forecasting Science, Chinese Academy of Sciences, Beijing 100190, China
Cuihong Yang: School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China, Center for Forecasting Science, Chinese Academy of Sciences, Beijing 100190, China, and Academy of Mathematics and Systems Science, Chinese Academy of Sciences, Beijing 100190, China
Zongwu Cai: Department of Economics, The University of Kansas, Lawrence, KS 66045, USA

No 202008, WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS from University of Kansas, Department of Economics

Abstract: Broke out at the end of 2019, the novel coronavirus pneumonia (COVID-19) has been spreading in over 185 countries and territories, leading to more than 1,350,000 confirmed infections and 74,000 fatalities; the dismal performance of the global stock market and the collapse of oil prices are mostly attributed to this outbreak. Motivated by this, we evaluate the economic impacts of COVID-19 outbreak on both national and industrial levels by employing quarterly computable general equilibrium (CGE) model. Our results reveal that the epidemic may lower China’s economic growth in 2020 by 1.2%, versus 1.9% and 0.2% for consumption and investment, respectively. The service industry suffers the most from the outbreak, and the Accommodation-Food-Beverage service, Entertainment, Wholesale-Retail Trade are identified as the most vulnerable sectors, with the negative impact on output reaching as high as 5.6%. This study indicates that implementing effective measures for preventing and controlling the epidemic and policies for post-disease economic recovery play critical role in curbing the potential economic damage.

Keywords: coronavirus pneumonia (COVID-19); Damage assement; Economic impacts; Economy recovery; Global stock market; SARS. (search for similar items in EconPapers)
Date: 2020-03, Revised 2020-03
New Economics Papers: this item is included in nep-cna, nep-mac and nep-tra
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