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Economic Consequences of the COVID-19 Pandemic: Will It Be a Barrier to Achieving Sustainability?

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  • Yoonkyung Choi

    (Global Sustainable Development Economic Institute, Sunmoon University, Asan 31460, Korea)

  • Hyun-ju Kim

    (Global Sustainable Development Economic Institute, Sunmoon University, Asan 31460, Korea)

  • Yoon Lee

    (Department of International Economics and Trade, Global Sustainable Development Economic Institute, Sunmoon University, Asan 31460, Korea)

Abstract

This study quantitatively analyzes the economic impact of the coronavirus disease 2019 (COVID-19) crisis on Korea and other major nations using the standard Global Trade Analysis Project (GTAP) model. Based on the GTAP9a database, we created three scenarios that differed in the severity of the impact of COVID-19, divided the economic shocks witnessed in each scenario into three stages, and applied them at varying degrees to six regions and 10 industry sectors. The results revealed an increase in investments and a decrease in GDP, income, production, and exports, with private household expenditure and export value showing the largest declines in all regions. Under Scenario BA, the export value of the tourism industry decreased by approximately 28%, and private household expenditure on tourism industry imports declined by 33.4% on average across all regions. Conversely, government expenditure increased following the economic recession and increased tax revenue. The results showed similar trends across regions and sectors, with only slight variances according to each region’s economic structural characteristics. By shedding light on proposals and approaches to overcome the global economic crisis amid the ongoing pandemic, this study provides baseline data for devising more practical, detailed response plans and policy directions for potential future calamities.

Suggested Citation

  • Yoonkyung Choi & Hyun-ju Kim & Yoon Lee, 2022. "Economic Consequences of the COVID-19 Pandemic: Will It Be a Barrier to Achieving Sustainability?," Sustainability, MDPI, vol. 14(3), pages 1-16, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:3:p:1629-:d:738796
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    References listed on IDEAS

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    1. Hojin Jung & Minjae Park & Kihoon Hong & Eunjung Hyun, 2016. "The Impact of an Epidemic Outbreak on Consumer Expenditures:An Empirical Assessment for MERS Korea," Sustainability, MDPI, vol. 8(5), pages 1-15, May.
    2. Alan Siu & Y. C. Richard Wong, 2004. "Economic Impact of SARS: The Case of Hong Kong," Asian Economic Papers, MIT Press, vol. 3(1), pages 62-83.
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    2. Nicholas Bamegne Nambie & Philomena Dadzie & Dorcas Oye Haywood-Dadzie, 2023. "Measuring the Effect of Income Inequality, Financial Inclusion, Investment, and Unemployment, on Economic Growth in Africa: A Moderating Role of Digital Financial Technology," International Journal of Economics and Financial Issues, Econjournals, vol. 13(4), pages 111-124, July.
    3. Michela Gabelloni & Lorenzo Faggioni & Roberta Fusco & Federica De Muzio & Ginevra Danti & Francesca Grassi & Roberta Grassi & Pierpaolo Palumbo & Federico Bruno & Alessandra Borgheresi & Alessandra B, 2023. "Exploring Radiologists’ Burnout in the COVID-19 Era: A Narrative Review," IJERPH, MDPI, vol. 20(4), pages 1-16, February.
    4. Maribel Paredes-Torres & Ana del Rocío Cando-Zumba & José Varela-Aldás, 2022. "Income Tax for Microenterprises in the COVID-19 Pandemic: A Case Study on Ecuador," Sustainability, MDPI, vol. 14(5), pages 1-20, February.

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