Original scientific paper
https://doi.org/10.17535/crorr.2023.0006
Macroeconomic impacts of COVID-19 pandemic first wave in the world
Karol Szomolányi
orcid.org/0000-0003-3749-7148
; Department of Operations Research and Econometrics, University of Economics in Bratislava, Dolnozemsk´a 1/b, 852 35 Bratislava, Slovakia
Martin Lukáčik
orcid.org/0000-0002-1699-6450
; Department of Operations Research and Econometrics, University of Economics in Bratislava, Dolnozemsk´a 1/b, 852 35 Bratislava, Slovakia
Adriana Lukáčiková
orcid.org/0000-0003-1569-6242
; Department of Operations Research and Econometrics, University of Economics in Bratislava, Dolnozemsk´a 1/b, 852 35 Bratislava, Slovakia
Abstract
The paper seeks to identify the essential global-economic macro-shocks resulting from efforts by consumers, firms, or government policies to reduce social distancing, which caused a sharp temporary change in the world economy during the pandemic outbreak in the second quarter of 2020. The purpose is fulfilled using a simple two-period real-business cycle model. The observed reaction of the global economy in the second period of 2020 is measured by the deviation of the time series of GDP and its components, labor, labor income, and average labor product in the USA and EU from
the log-quadratic trend. The model can replicate the observed economic response by reducing the total factor productivity, labor demand, and labor supply—no need to assume sticky prices. As a sudden drop in performance is supposed, followed by a modest recovery already in the following period, it is not assumed that the government would be able to avert it in time with fiscal or monetary policy. Moreover, the assumption of variable prices and supply-side shocks does not support such a policy.
Keywords
global economy; pandemic economic impacts; the first wave; the second period of 2020; two-period real-business cycle model
Hrčak ID:
305784
URI
Publication date:
10.7.2023.
Visits: 318 *