USC Dornsife Adjunct Professor of the Practice in Economics (and CREATE Fellow) Terry Walmsley, and a team of CREATE researchers, have estimated the economic impacts of COVID-19 in the U.S. using a disaster economic consequence analysis framework implemented by a dynamic computable general equilibrium (CGE) model. The model facilitates identification of relative influences of several causal factors as “shocks” to the model, including mandatory business closures, disease spread trajectories, behavioral responses, resilience, pent-up demand, and government stimulus packages. The analysis is grounded in primary data on avoidance behavior and healthcare parameters. The decomposition of the influence of various causal factors will help policymakers offset the negative influences and reinforce the positive ones during the remainder of this pandemic and future ones.
- The impact of COVID-19 on the U.S. economy and its recovery were estimated through 2023.
- A disaster economics framework was used to identify major causal factors of impacts.
- Mandatory closures and avoidance behavior had the largest negative impacts.
- Pent-up demand, fiscal stimulus, and telework had the largest offsetting impacts.
Read the full article in Economic Modelling: https://www.sciencedirect.com/science/article/pii/S0264999322003844
The final report on the study is available here.
In addition, note the following journal articles emanating from CREATE’s research on the impacts of COVID-19 on the U.S. economy:
- Rose, A. 2021. “COVID-19 Economic Impacts in Perspective: A Comparison to Recent U.S. Disasters,” International Journal of Disaster Risk Reduction 60: 102317. doi.org/10.1016/j.ijdrr.2021.102317
- Rose, A., T. Walmsley, and D. Wei. 2021. “Spatial Transmission of the Economic Impacts of COVID-19 through International Trade," Letters in Spatial and Resource Sciences 14: 169-96 doi.org/10.1007/s12076-021-00271-8
- Walmsley, T., A. Rose and D. Wei. 2021. “The Impacts of the Coronavirus on the Economy of the United States,” Economics of Disasters and Climate Change 5(1): 1-52. https://link.springer.com/article/10.1007/s41885-020-00080-1
- Walmsley, T., A. Rose and D. Wei. 2021. “Impact on the U.S. Macroeconomy of Mandatory Business Closures in Response to the COVID-19 Pandemic,” Applied Economics Letters 28(15): 1293-1300. https://www.tandfonline.com/doi/full/10.1080/13504851.2020.1809626