The effect of increasing health disaster risk and public spending on economy conditions: a DSGE perspective

PurposeThe main motivation of the present study is to understand the severity of the effect of health shock on Iran's oil economy and analyze the role of government under these conditions.Design/methodology/approachDynamic stochastic general equilibrium (DSGE) models can show the precise interactions between market decision-makers in the context of general equilibrium. Since the duration of the virus outbreak and its effect on the economy is not known, it is more appropriate to use these models.FindingsThe results of the survey of hands-on policies scenarios compared to the state of hands-off policy indicate that the effect of government expending shocks on the economy under pandemic disease conditions has much less feedback on macroeconomic variables.Originality/valueAs a proposed policy, it is recommended that the government play a stabilizing role under pandemic disease conditions.Key messages There is no study regarding health shock and its economic effects in Iran using DSGE models. Also, in foreign studies, the health shock in an oil economy has not been modeled.The general idea in the present study is how the prevalence of a pandemic infectious disease affects the dynamics of macroeconomic variables.In three different scenarios, according to the persistence of health disaster risk and the deterioration rate of health capital due to this shock, the model is simulated.In modeling pandemic diseases, quarantine hours are considered as part of the total time of individuals.According to the research findings, it is recommended that the government, as a policy-maker, play a stabilizing role under pandemic crises conditions.

Economic Role of Government Budget Revision in the Presence of COVID-19

Fiscal policies are one of the most important instruments of government to guide the progress of the country's economic development. They find significant use in cases where the economy is experiencing a period of recession, such as the current one caused by COVID-19. This study aims to assess the multiplier effects that budget revision has on the economy for the case of Albania, and more specifically by referring to the initial and revised budget scenario for the year 2020 which is characterized by significant changes caused by the presence of COVID-19. Referring to the multipliers from the input–output tables (IOT) the total effect that the state budget brings to the economy for a certain year is derived. From this paper, it appears that the budget restructuring that takes place during the year does not take into account the multiplier effect in the economy, but is mostly done for specific purposes related to certain government functions. In this context, it is very important that various options during budget revision are evaluated, concluding with the option that has the highest returns for the economy.

Determinants of Public Health Personnel Spending in Spain.

Public health is funded with government funds gathered from tax revenues, whether national, provincial or municipal. The health system therefore suffers during economic crisis periods, whether due to disinvestment, loss of purchasing power among health care personnel or the decrease in the number of professionals. This worsens the situation, as it is necessary to cover the needs of an increasingly elderly population and with a longer life expectancy at birth. The present study intends to show a model which explains the determination of the "Public Health Personnel Expenditure" in Spain for a determined period. A multiple linear regression model was applied to the period including the years 1980-2021. Macroeconomic and demographic variables were analyzed to explain the dependent variable. Variation in health personnel expenditure: "We included those variables which presented a high or very high correlation above r > 0.6. The variables which explain the behavior of Variation in health personnel expenditure". It was a determining factor in the present study to consider that the variables with the greatest repercussions on health policy were mainly macroeconomic variables rather than demographic variables, with the only significant demographic variable that had a specific weight lower than macroeconomic variables being "Birth Rate". In this sense, the contribution made to the scientific literature is to establish an explanatory model so that public policy managers and states in particular can consider it in their public spending policies, bearing in mind that health expenditures in a Beveridge-style health system, as Spain has, are paid with funds drawn from tax revenues.

Increasing Public Expenditures Due to COVID-19 Pandemic Crisis: An Assessment According to Peacock-Wiseman Hypothesis

Although the COVID-19 pandemic crisis is basically a health crisis, it does not only concern health policies due to its economic and social effects. In the fight against the pandemic, it is important to implement economic, social and financial policies as well as health policies. In this context, effectively using the public spending tools of fiscal policy in the fight against the COVID-19 pandemic has become a priority rather than a political choice for governments. In times of pandemics, sufficient increase in public expenditures is an effective political tool for governments in order to prevent the decline of the economic growth process, loss of welfare, large-scale unemployment and supply problems. Considering the Peacock-Wiseman Hypothesis in the public finance literature, if public expenditures are used as an effective policy tool in the COVID-19 pandemic crisis, a leap in public expenditures is likely. This study evaluates the relationship between the COVID-19 pandemic crisis and public expenditures and reveals the public expenditure policies of selected countries in the fight against COVID-19. It can be said that there is a positive relationship between the level of development of countries and the increase in public expenditures in the COVID-19 pandemic crisis. It is seen that developing economies mostly resort to credit instruments, while developing countries mainly use public expenditure instruments, they also use credits and supports sufficiently. However, due to the continuation of the COVID-19 pandemic crisis, obtaining definitive results will emerge in post-pandemic studies. For this reason, the final results of this study will become clear with the studies carried out after the pandemic crisis. © 2022, The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.