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Recession and Recovery of the Pandemic

Author

Listed:
  • Lester C Hunt

    (University of Portsmouth)

  • Anqi Zhang

    (Fudan University)

  • Shuonan Zhang

    (University of Portsmouth)

Abstract

We develop an SIR-macroeconomic model with virus detection and inequality to study their implications for economic and health consequences during a pandemic crisis. We find a two-way relationship between the pandemic recession and inequality that exacerbate each other although such a vicious circle could be broken by accurate and extensive testing. This mitigation effect can be improved given complementary arrangements such as social protection. The extensive virus detection could not only be a better alternative intervention to lock-down to break the “life-or-economy” trade-off, but also prevent the economy to be permanently damaged if there is reinfection.

Suggested Citation

  • Lester C Hunt & Anqi Zhang & Shuonan Zhang, 2022. "Recession and Recovery of the Pandemic," Working Papers in Economics & Finance 2022-05, University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group.
    • Handle: RePEc:pbs:ecofin:2022-05
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    References listed on IDEAS

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    More about this item

    Keywords

    COVID-19; SIR-macro model; testing; inequality;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • H0 - Public Economics - - General
    • I1 - Health, Education, and Welfare - - Health

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