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We analyze the impact of different designs of COVID-19-related lockdown policies on economic loss and mortality using a micro-level simulation model, which combines a multi-sectoral closed economy with an epidemic transmission model. In particular, the model captures explicitly the (stochastic) effect of interactions between heterogeneous agents du...
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... While these assumptions are acceptable in analysing the effects of short-term COVID-19 restrictions, they are unrealistic if the restrictions last for years because firms cannot survive in the long run without making profits, and unprofitable firms may permanently lose market share to highly profitable ones in a competitive business environment. A few small-scale studies focusing on the policy analysis of a specific region consider upsizing (downsizing) the workforce of firms with rising (declining) profits [54,61,62]. However, the evolution of global supply chains under the competition of firms in the global market is still unclear. ...
Since the start of the COVID-19 pandemic, many firms have been shifting their supply chains away from countries with stringent control measures to mitigate supply-chain disruption. Nowadays, the global economy has reopened from the COVID-19 pandemic at various paces in different countries. Understanding how the global supply network evolves during and after the pandemic is necessary for determining the timing and speed of reopening. By harnessing the real-world and real-time global human movement and the latest macroeconomic data, we propose an evolutionary economic-epidemiological model to explore the evolutionary dynamics of the global supply network under various global reopening scenarios. We find that, for highly restrictive countries, the delay in reopening has limited public health benefits in the long run but leads to significant supply-chain loss. A longer duration of stringent control measures substantially hurts the profitability of firms in highly restrictive countries, leading to slower supply-chain recovery in 5 years. This research presents the first data-driven evidence of supply chain loss due to the timing and speed of reopening and sheds light on the post-pandemic supply-chain reformation and recovery. Insights learned from COVID-19 will also be a valuable policymaking reference for combating future infectious disease epidemics and geopolitical changes.
... To curb the spread of the virus, many countries implemented measures such as population movement restrictions that slowed down economic activity, resulting in a trade-off between the health system and the economy [4][5][6]. The government was faced with the unique challenge of handling and minimizing risks associated with these trade-offs and developing integrated policies that involve various actors to build resilience and promote recovery after the pandemic [7][8][9][10][11][12]. ...
The COVID-19 pandemic has not only affected public health but has also significantly impacted the economy. Bandung, a bustling city in Indonesia serving as a satellite to the capital, has been hit hard due to its high population density, mobility, and reliance on the tourism, trade, and transportation sectors. Using a Computable General Equilibrium (CGE) model developed at the interregional level of Indonesia, this study investigates the microeconomic indicators of several economic activities in Bandung, namely, the transportation, accommodation and food–beverage, water supply, and trade (MSMEs) sectors, to assess the impact of the pandemic. Additionally, the study examines the role of private sector actors in contributing to the sustainable recovery efforts toward achieving the Sustainable Development Goals (SDGs) amidst the pandemic. The findings reveal that Bandung’s transportation, accommodation, food and beverage, water supply, and trade sectors experienced a significant decline in economic activity. However, there was a gradual recovery, with increased economic activity between 2019 and 2021. Private sector actors and the health sector were the main drivers of economic recovery, with other sectors also contributing to the effort.
... With this framework we contribute to a small but growing literature on joint economic and epidemiological dynamics in agent-based settings (e.g. Mellacher 2020; Basurto et al. 2022). ...
In the context of the Covid-19 pandemic, we evaluate the effects of vaccines and virus variants on epidemiological and macroeconomic outcomes by means of Monte Carlo simulations of a macroeconomic-epidemiological agent-based model calibrated using data from the Lombardy region of Italy. From simulations we infer that vaccination plays the role of a mitigating factor, reducing the frequency and the amplitude of contagion waves and significantly improving macroeconomic performance with respect to a scenario without vaccination. The emergence of a variant, on the other hand, plays the role of an accelerating factor, leading to a deterioration of both epidemiological and macroeconomic outcomes and partly negating the beneficial impacts of the vaccine. A new and improved vaccine in turn can redress the situation. Vaccinations and variants, therefore, can be conceived of as drivers of an intertwined cycle impacting both epidemiological and macroeconomic developments.
... To curb the spread of the virus, many countries have implemented measures such as population movement restrictions that have slowed down economic activity, resulting in a tradeoff between the health system and the economy [4][5][6]. The government was faced with the unique challenge of handling and minimizing risks associated with these trade-offs and developing integrated policies that involve various actors to build resilience and promote recovery after the pandemic [7][8][9][10][11][12]. ...
The COVID-19 pandemic has not only affected public health but has also significantly impacted the economy. Bandung, a bustling city in Indonesia serving as a satellite to the capital, has been hit hard due to its high population density, mobility, and reliance on the tourism, trade, and transportation sectors. Using a Computable General Equilibrium (CGE) model developed at the inter-regional level of Indonesia, this study investigates the microeconomic indicators of several economic activities in Bandung to assess the impact of the pandemic. Additionally, the study examines the role of private sector actors in contributing to the sustainable recovery efforts toward achieving Sustainable Development Goals (SDGs) amidst the pandemic. The findings reveal that Bandung's transportation, accommodation, food and beverage, water supply, and trade sectors experienced a significant decline in economic activity. However, there was a gradual recovery with increased economic activity between 2019 and 2021. Private sector actors and the health sector were the main drivers of economic recovery, with other sectors also contributing to the efforts.
... Acemoglu et al. 2021;Britton et al. 2020;Ellison 2020;Bursztyn et al. 2020) and agent-based approaches (e.g. Basurto et al. 2021;Delli Gatti and Reissl 2022;Mellacher 2020). ...
I study the impact of corona populism -- politics aimed at denying or downplaying the danger posed by COVID-19 for strategic reasons -- on the evolution of the pandemic using regional data from Austria. The right-wing FPOE first vocalized strong support for strict lockdown measures, but made a corona populist turn at the end of the first wave of infections. Using regression analysis, I show that the vote share of the FPOE at the last national parliamentary elections is a strong predictor for the number of COVID-19 deaths after the FPOE switched their policy stance, while there is no or even a negative correlation before the policy switch. These results are robust under simple as well as sophisticated specifications of the model controlling for demographic and socioeconomic conditions. Interestingly, I do not find a statistically significant correlation between the FPOE vote share and the reported number of infections. I hypothesize that this can be traced back to a self-selection bias in testing. To explore this hypothesis, I extend the classical SIRD model to incorporate conditional quarantine and two groups of agents: the majority and the corona sceptics, where the latter are less inclined to get tested and engage in social distancing. Such a model can explain the nontrivial empirics: if mixing is sufficiently homophilic, an increase in the share of corona sceptics can cause an increase in the number of deaths without increasing the number of reported infections. I finally discuss the implications for both groups.
This paper explores the impact of technological change on industry concentration and the underlying firm dynamics. Within the agent-based model EURACE@Unibi, it is shown that an exogenous acceleration in technological change in the capital goods sector leads to a diverging firm population in the downstream consumption goods sector in terms of productivities and skills and in turn also to a higher market concentration. A novel ex-post analysis at the micro level shows that the later dominant firms were relatively small at the beginning but benefited from a virtuous cycle between their capital choice and the skill level within their workforce that is initiated by a fortunate outcome on the labor market.
We employ a new macroeconomic–epidemiological agent-based model to evaluate the “lives vs livelihoods” trade-off brought to the fore by coronavirus disease (Covid-19). An infectious disease spreads across the network of agents’ social and economic contacts and feeds back on the economic dimension of the model through various channels such as employment and consumption demand. Under a lockdown (LD) scenario, the model is able to closely reproduce the epidemiological dynamics of the first wave of the Covid-19 epidemic in the Lombardy region of Italy. We find that, in the presence of non-pharmaceutical interventions, there is no trade-off between lives and macroeconomic losses as a stricter LD eventually leads to superior outcomes along both dimensions. We also evaluate the efficacy of various macroeconomic stabilization policies designed to counteract the downturn generated by the epidemic and LD measures. In an agent-based setting we gain additional insights on the way in which such policies impact not only on gross domestic product but also, for instance, on firms’ defaults and relative prices. Liquidity support for firms, a short-time working scheme with compensation for workers, and direct transfer to households stand out as the most effective policy tools.
