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Home Production: Does It Matter for the Korean Macroeconomy during the COVID-19 Pandemic?

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  • Yugang He

    (College of Liberal Arts, Sejong University, Seoul 05006, Korea)

Abstract

The COVID-19 pandemic has had a tremendous influence on many aspects of life in Korea. Some people have had to relocate their workplaces from factories or offices to their homes in order to stop the spread of the virus. This paper examines the effects of home production on the Korean macroeconomy during the COVID-19 pandemic. Then, the impulse response function is used to perform an empirical analysis. The results show that total output, market goods consumption, investment, capital, and market work hours all decline as a consequence of a home productivity shock, while home goods consumption, wages, transfer payments, and home work hours all increase. Moreover, using fiscal policies such as lowering the capital tax rate and increasing the fiscal deficit, the effect of the COVID-19 pandemic on the Korean macroeconomy can be improved. Robustness tests are carried out in light of the uneven economic development and different COVID-19 pandemic scenarios inside and outside the Seoul circle. The conclusions of this paper are accurate and reliable, as shown by the results of the robustness test.

Suggested Citation

  • Yugang He, 2022. "Home Production: Does It Matter for the Korean Macroeconomy during the COVID-19 Pandemic?," Mathematics, MDPI, vol. 10(12), pages 1-12, June.
    • Handle: RePEc:gam:jmathe:v:10:y:2022:i:12:p:2029-:d:836771
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    Cited by:

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    2. Yugang He & Moongi Lee, 2022. "Macroeconomic Effects of Energy Price: New Insight from Korea?," Mathematics, MDPI, vol. 10(15), pages 1-14, July.
    3. Yao Li & Yugang He & Renhong Wu, 2023. "Traversing the Macroeconomic Terrain: An Exploration of South Korea’s Economic Responsiveness to Cross-Border E-Commerce Production Technology Alterations in the Global Arena," Sustainability, MDPI, vol. 15(15), pages 1-20, July.
    4. Yugang He & Sungho Rho, 2024. "Macroeconomic Stabilization in Crisis: The Role of Investment Shocks and Policy Responses in South Korea During COVID-19," Mathematics, MDPI, vol. 12(24), pages 1-23, December.
    5. Woraphon Yamaka & Paravee Maneejuk & Rungrapee Phadkantha & Wiranya Puntoon & Payap Tarkhamtham & Tatcha Sudtasan, 2023. "Survival and Duration Analysis of MSMEs in Chiang Mai, Thailand: Evidence from the Post-COVID-19 Recovery," Mathematics, MDPI, vol. 11(4), pages 1-21, February.

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