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Reanimating a Dead Economy: Financial and Economic Analysis of a Zombie Outbreak

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  • Zachary Feinstein

Abstract

In this paper, we study the financial and economic implications of a zombie epidemic on a major industrialized nation. We begin with a consideration of the epidemiological modeling of the zombie contagion. The emphasis of this work is on the computation of direct and indirect financial consequences of this contagion of the walking dead. A moderate zombie outbreak leaving 1 million people dead in a major industrialized nation could result in GDP losses of 23.44% over the subsequent year and a drop in financial market of 29.30%. We conclude by recommending policy actions necessary to prevent this potential economic collapse.

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  • Zachary Feinstein, 2020. "Reanimating a Dead Economy: Financial and Economic Analysis of a Zombie Outbreak," Papers 2003.09943, arXiv.org.
    • Handle: RePEc:arx:papers:2003.09943
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    References listed on IDEAS

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    1. Fernando Duarte & Thomas M. Eisenbach, 2021. "Fire‐Sale Spillovers and Systemic Risk," Journal of Finance, American Finance Association, vol. 76(3), pages 1251-1294, June.
    2. Rama Cont & Eric Schaanning, 2017. "Fire sales, indirect contagion and systemic stress testing," Working Paper 2017/2, Norges Bank.
    3. Tathagata Banerjee & Zachary Feinstein, 2019. "Price mediated contagion through capital ratio requirements with VWAP liquidation prices," Papers 1910.12130, arXiv.org, revised Feb 2021.
    4. Cont, Rama & Schaanning, Eric, 2019. "Monitoring indirect contagion," Journal of Banking & Finance, Elsevier, vol. 104(C), pages 85-102.
    5. Feinstein, Zachary, 2020. "Capital regulation under price impacts and dynamic financial contagion," European Journal of Operational Research, Elsevier, vol. 281(2), pages 449-463.
    6. Rodrigo Cifuentes & Hyun Song Shin & Gianluigi Ferrucci, 2005. "Liquidity Risk and Contagion," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 556-566, 04/05.
    7. Ryan Niladri Banerjee & Boris Hofmann, 2018. "The rise of zombie firms: causes and consequences," BIS Quarterly Review, Bank for International Settlements, September.
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