Health accelerator and financial frictions in macroeconomic modelling: how to modelling pandemic effect?
Conference
64th ISI World Statistics Congress - Ottawa, Canada
Format: CPS Abstract
Keywords: economic
Session: CPS 37 - Statistics and economics I and CPS 79 - Official Statistics: Economics
Tuesday 18 July 8:30 a.m. - 9:40 a.m. (Canada/Eastern)
Abstract
In this paper, we have developed a new approach to macroeconomic modelling by proposing to introduce the agent’s behaviour in a pandemic situation. In the form of health frictions that alter the economic agent’s behaviour in crisis situations, we have set up a DSGE model whose behavioural functions take into account the existence of healthy and infected populations. The novelty of this work is the inclusion of the two frictions; health and financial, the idea is to succeed in describing the macro-financial dynamics in a pandemic situation. The results obtained confirm the existence of a health accelerator that amplifies macroeconomic shocks.