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The Macroeconomic Consequences of Stimulating Offline Consumption during COVID-19

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  • Dawis Kim
  • Minseung Kim
  • Myungkyu Shim

Abstract

This paper analyses the macroeconomic consequences of a fiscal policy implemented in South Korea during COVID-19, ‘Korean Economic Impact Payment (KEIP)’ program, that aims to stimulate offline consumption. In doing so, we modify a SIR-macro model by explicitly distinguishing online- and offline consumption goods. Benchmark analysis predicts that (1) there are positive effects on key macro variables at the impact while progress of the epidemic hardly changes and (2) the transfer multiplier from the KEIP is estimated to be about 0.5 at the impact, a value with what we expect from the usual neo-classical business cycle model.

Suggested Citation

  • Dawis Kim & Minseung Kim & Myungkyu Shim, 2021. "The Macroeconomic Consequences of Stimulating Offline Consumption during COVID-19," Global Economic Review, Taylor & Francis Journals, vol. 50(1), pages 20-42, January.
    • Handle: RePEc:taf:glecrv:v:50:y:2021:i:1:p:20-42
    DOI: 10.1080/1226508X.2021.1875868
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    Cited by:

    1. Ding, Chaoxun & Zhang, Ruidan & Wu, Xuepin, 2023. "The impact of product diversity and distribution networks on consumption expansion," Journal of Business Research, Elsevier, vol. 161(C).
    2. Hsu, Ching-Chi & Ngo, Quang-Thanh & Chien, FengSheng & Li, Li & Mohsin, Muhammad, 2021. "Evaluating green innovation and performance of financial development: mediating concerns of environmental regulation," MPRA Paper 109671, University Library of Munich, Germany.
    3. Sorin-Ciprian Teiusan & Dorina Plescaci, 2022. "An Insight Into Research Of Tax And Fiscal Policy In Response To Covid-19 Crisis," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 2, pages 37-47, April.

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