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Habits and demand changes after COVID-19

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  • Bambi, Mauro
  • Ghilli, Daria
  • Gozzi, Fausto
  • Leocata, Marta

Abstract

In this paper, we investigate how a transitory lockdown of a sector of the economy may have changed our habits and, therefore, altered the goods’ demand permanently. In a two-sector infinite horizon economy, we show that the demand of the goods produced by the sector closed during the lockdown could shrink or expand with respect to their pre-pandemic level depending on the lockdown’s duration and the habits’ strength. We also show that the end of a lockdown may be characterized by a price surge due to a combination of strong demand of both goods and rigidities in production.

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  • Bambi, Mauro & Ghilli, Daria & Gozzi, Fausto & Leocata, Marta, 2024. "Habits and demand changes after COVID-19," Journal of Mathematical Economics, Elsevier, vol. 110(C).
    • Handle: RePEc:eee:mateco:v:110:y:2024:i:c:s030440682300126x
    DOI: 10.1016/j.jmateco.2023.102933
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    References listed on IDEAS

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