Template-Type: ReDIF-Paper 1.0
Author-Name: Phurichai Rungcharoenkitkul
Author-X-Name-First: Phurichai
Author-X-Name-Last: Rungcharoenkitkul
Title: Macroeconomic consequences of pandexit
Abstract: This paper proposes a quantitative framework to analyse the interactions between epidemiological and economic developments, and assesses the macroeconomic impact of managing the late stage of the Covid-19 pandemic. The framework features a susceptible-exposed- infectious-recovered (SEIR)-type model that describes the pandemic evolution conditional on society's mobility choice, and a policy unit that chooses mobility optimally to balance lives and livelihood objectives. The model can be matched to daily data via a fast and robust empirical procedure, allowing a timely policy analysis as situations evolve. As of 10 March 2021, the projected median output loss across 27 advanced and emerging market economies in 2021 is about 2 1/4% of pre-pandemic trends. This projected outcome hinges on a sustained progress in vaccination and no major epidemiological setbacks. Vaccination impediments or a third-wave surge in infection rate could raise median output loss to 3 - 3 3/4%. In the most severe scenario, 
virus mutations that compromise existing immunity could require more protracted lockdowns. In this case, median output loss may reach 5% in 2021 alone, with further repercussions in subsequent years.
Length: 54 pages
Creation-Date: 2021-03
File-URL: https://www.bis.org/publ/work932.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work932.htm
File-Format: text/html
Number: 932
Keywords: Covid-19 pandemic, health-economic tradeoffs, SEIR model, lockdown, vaccines
Classification-JEL: E00, I18
Handle: RePEc:bis:biswps:932