ABSTRACT
Purpose: The recent COVID-19 has obliged governments to enact large-scale policies to contain it. A topic of economic debate is the quantification of the impact that these policies can create in the economy, with the aim of activating regulatory mechanisms to minimize this impact. In this vein, this study aims to propose a quantification of the effects of the Italian government policy that blocks nonessential production activities. Design/methodology/approach: The authors use a multisectoral extended inoperability model on the social accounting matrix of Italy. The analysis identifies the pandemic's impact on outputs, endogenous demands, value-added and disposable incomes of institutional sectors. Findings: The construction and real estate sectors revealed a significant contraction followed by the retail trade and hotel and catering services sectors. The output contraction further impacts the value-added generation, disposable income and final demand components. Originality/value: The current pandemic is alleged to have a greater impact than the epidemics of the past century, considering the present dimension of the world economy and the increasing interconnections between industries and institutions. In this scenario, it is challenging to safeguard not only human health and life but also the economy. Hence, there is a need to establish a trade-off between health and economics;and in this regard, the current study empirically quantifies the impact of health measures on the economy. The findings of this study help identify the sectors that are more prone to disaster effects and also present the structure of income circular flow in the Italian economy. © 2021, Emerald Publishing Limited.
ABSTRACT
PurposeThe recent COVID-19 is forcing governments to implement policies on a large scale to counter its spread. A central issue in the economic debate is the effective quantification of the impact that the policies may implicitly have on the economy. This study quantifies the effects of lockdown in the United States.Design/methodology/approach The study uses a dynamic computable general equilibrium (DCGE) model calibrated on a social accounting matrix (SAM). The lockdown policy is applied on the supply side, by using a reduction in the production according to the closing time of each industry. The reduction in the demand is also applied, throughout the contraction of the household consumption that is diversified by the commodities. In order to analyse the pure effect of the lockdown policy, the interventions by the policy makers are not considered in this study.FindingsThe results show an important contraction of productivity in the food industry, the real estate activities, the constructions and the general services.Originality/valueThe contraction produces a fall of the GDP for the whole period analysed, traced by the investments, which includes repercussions on the whole productive system, employment and income of the institutional sectors.
ABSTRACT
Purpose With the global outbreak of COVID-19 that has made the economic activities standstill, countries have taken immediate measures to safeguard not only the human lives but also the economies. This study investigates empirically the lockdown impact of current pandemic on the Saudi economy. Design/methodology/approach The study employs inoperability input-output model (IIOM) on the input-output table (IOT) of Saudi Arabia for the analysis. Findings Findings show that with the closure of few sectors for the period of two months, the GDP declined to 6.49%. Findings also show a negative impact on consumption, investments and exports. Research limitations/implications One limitation of current study is that it uses IOTs which lack primary and secondary income distribution that is vital for presenting complete interindustry connections in the analysis. The interindustry structures relate to the consumption structures which ultimately lead to the income distribution and affect the consumption behaviors of economic agents. Hence, the complete income circular flow is not incorporated in IIOM using IOT. The findings of current study would be well grounded if it endogenized the primary and secondary income distribution. Practical implications The practical implication of this study is the use of IIOM for anticipating the potential loss against the backdrop of catastrophes and pandemics. The IIOM has the capability to predict the economic effects of disruptive events and hence the policy-makers can better predict and devise prudent policies to avoid the likely threats to the economy. Originality/value The current situation is unprecedented, and it is challenging for governments to forecast the economic repercussions. Several economic sectors have been inoperative due to lockdown implemented by the governments. This study empirically estimated the inoperability produced by the current pandemic. The findings are consistent with other estimated statistics, thereby proving the efficacy of IIOM to anticipate the economic repercussions of natural hazards.
ABSTRACT
Purpose: The recent COVID-19 has obliged governments to enact large-scale policies to contain it. A topic of economic debate is the quantification of the impact that these policies can create in the economy, with the aim of activating regulatory mechanisms to minimize this impact. In this vein, this study aims to propose a quantification of the effects of the Italian government policy that blocks nonessential production activities. Design/methodology/approach: The authors use a multisectoral extended inoperability model on the social accounting matrix of Italy. The analysis identifies the pandemic’s impact on outputs, endogenous demands, value-added and disposable incomes of institutional sectors. Findings: The construction and real estate sectors revealed a significant contraction followed by the retail trade and hotel and catering services sectors. The output contraction further impacts the value-added generation, disposable income and final demand components. Originality/value: The current pandemic is alleged to have a greater impact than the epidemics of the past century, considering the present dimension of the world economy and the increasing interconnections between industries and institutions. In this scenario, it is challenging to safeguard not only human health and life but also the economy. Hence, there is a need to establish a trade-off between health and economics;and in this regard, the current study empirically quantifies the impact of health measures on the economy. The findings of this study help identify the sectors that are more prone to disaster effects and also present the structure of income circular flow in the Italian economy. © 2021, Emerald Publishing Limited.
ABSTRACT
The spread of the Covid-19 pandemic forced Central and Local Governments to introduce a set of policy measures aimed at restraining the contagion among people. These interventions resulted in actions that put a brake on the production system and at the same time on the growth of aggregate demand. The economic impact is far-reaching, with direct, indirect and induced effects mainly related to the interconnection between production sectors and institutional sectors. In particular, the economic impact of Covid-19 crisis exacerbated in the territories where the economy mostly depends on tourism activities, which continues to suffer a decrease despite the interruption of containment measures. The crucial point in the current economic debate is the estimation of the impact these measures will have on economic systems, with the aim of assessing the regulatory mechanisms necessary for the restart of the economic system. In this work we propose an estimate analysis of the effect of the Prime Minister Decree (DPCM) of 22 March 2020 on the economic system of the Sardinia Region. The analysis is developed through the application of a SAM based CGE and the results are provided in terms of change in production, final demand and disposable income.