Economic recovery forecasts under impacts of COVID-19

This paper proposes a joint model by combining the time-varying coefficient susceptible-infected-removal model with the hierarchical Bayesian vector autoregression model. This model establishes the relationship between several critical macroeconomic variables and pandemic transmission states and per...

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Veröffentlicht in:Economic modelling 2022-05, Vol.110, p.105821-105821, Article 105821
Hauptverfasser: Teng, Bin, Wang, Sicong, Shi, Yufeng, Sun, Yunchuan, Wang, Wei, Hu, Wentao, Shi, Chaojun
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Sprache:eng
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Zusammenfassung:This paper proposes a joint model by combining the time-varying coefficient susceptible-infected-removal model with the hierarchical Bayesian vector autoregression model. This model establishes the relationship between several critical macroeconomic variables and pandemic transmission states and performs economic predictions under two predefined pandemic scenarios. The empirical part of the model predicts the economic recovery of several countries severely affected by COVID-19 (e.g., the United States and India, among others). Under the proposed pandemic scenarios, economies tend to recover rather than fall into prolonged recessions. The economy recovers faster in the scenario where the COVID-19 pandemic is controlled. •We design a framework to measure future economic recovery under the pandemic.•We obtain baseline estimations under a pandemic-free scenario through BVAR.•The economic impact is explained by the pandemic-related indicator estimated by vSIR.•We assume two scenarios for how the pandemic will evolve.•Economies tend to recover rather than fall into a sustained recession in 2021.
ISSN:0264-9993
1873-6122
0264-9993
DOI:10.1016/j.econmod.2022.105821