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Health Accelerator and Financial Frictions in Macroeconomic Modelling

Author

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  • Firano Zakaria
  • Filali Adib Fatine

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. JEL classification: G21, G28, E42, E32

Suggested Citation

  • Firano Zakaria & Filali Adib Fatine, 2025. "Health Accelerator and Financial Frictions in Macroeconomic Modelling," SAGE Open, , vol. 15(1), pages 21582440251, March.
  • Handle: RePEc:sae:sagope:v:15:y:2025:i:1:p:21582440251325304
    DOI: 10.1177/21582440251325304
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    More about this item

    Keywords

    health frictions; financial frictions; DSGE; COVID-19; health accelerator;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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