Impacts of the Substitutability of Consumption on Infection Dynamics
In this study, we construct a dynamic stochastic general equilibrium (DSGE) model to examine the impacts of infectious diseases on consumption dynamics. Assuming a model that considers the substitutability of consumption, we show that the slump in demand for consumption goods will be low in high-su...
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| Format: | Article |
| Language: | English |
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EconJournals
2023-07-01
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| Series: | International Journal of Economics and Financial Issues |
| Subjects: | |
| Online Access: | https://econjournals.com/index.php/ijefi/article/view/14445 |
| _version_ | 1797785457989255168 |
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| author | Shin Fukuda |
| author_facet | Shin Fukuda |
| author_sort | Shin Fukuda |
| collection | DOAJ |
| description |
In this study, we construct a dynamic stochastic general equilibrium (DSGE) model to examine the impacts of infectious diseases on consumption dynamics. Assuming a model that considers the substitutability of consumption, we show that the slump in demand for consumption goods will be low in high-substitutability economy. Further, we show that immediate lockdown implementation upon the emergence of an epidemic can lead to a significant reduction in consumption, as well as alleviate the persistent stagnation of consumption, Although the analysis model in this study is simple, it reproduces the situations in United States and Japan, and it could be said that the impact of contingent policies, such as lockdown, has already been confirmed in Taiwan and New Zealand.
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| first_indexed | 2024-03-13T00:55:19Z |
| format | Article |
| id | doaj.art-981dbffdad7140099513ee7a4f564f31 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-03-13T00:55:19Z |
| publishDate | 2023-07-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-981dbffdad7140099513ee7a4f564f312023-07-07T05:23:09ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382023-07-0113410.32479/ijefi.14445Impacts of the Substitutability of Consumption on Infection DynamicsShin Fukuda0Komazawa University, Japan. In this study, we construct a dynamic stochastic general equilibrium (DSGE) model to examine the impacts of infectious diseases on consumption dynamics. Assuming a model that considers the substitutability of consumption, we show that the slump in demand for consumption goods will be low in high-substitutability economy. Further, we show that immediate lockdown implementation upon the emergence of an epidemic can lead to a significant reduction in consumption, as well as alleviate the persistent stagnation of consumption, Although the analysis model in this study is simple, it reproduces the situations in United States and Japan, and it could be said that the impact of contingent policies, such as lockdown, has already been confirmed in Taiwan and New Zealand. https://econjournals.com/index.php/ijefi/article/view/14445Consumption substitutability, COVID-19, Lockdown, DSGE model |
| spellingShingle | Shin Fukuda Impacts of the Substitutability of Consumption on Infection Dynamics International Journal of Economics and Financial Issues Consumption substitutability, COVID-19, Lockdown, DSGE model |
| title | Impacts of the Substitutability of Consumption on Infection Dynamics |
| title_full | Impacts of the Substitutability of Consumption on Infection Dynamics |
| title_fullStr | Impacts of the Substitutability of Consumption on Infection Dynamics |
| title_full_unstemmed | Impacts of the Substitutability of Consumption on Infection Dynamics |
| title_short | Impacts of the Substitutability of Consumption on Infection Dynamics |
| title_sort | impacts of the substitutability of consumption on infection dynamics |
| topic | Consumption substitutability, COVID-19, Lockdown, DSGE model |
| url | https://econjournals.com/index.php/ijefi/article/view/14445 |
| work_keys_str_mv | AT shinfukuda impactsofthesubstitutabilityofconsumptiononinfectiondynamics |