<p>Just wanted to add that the economists at the Federal Reserve Board of Governors have posted some new papers this month (April).  The new papers can be found here:
<a href="https://www.federalreserve.gov/econres/feds/" rel="nofollow noreferrer">https://www.federalreserve.gov/econres/feds/</a></p>

<p><a href="https://www.federalreserve.gov/econres/feds/files/2020031pap.pdf" rel="nofollow noreferrer">Social Distancing and Supply Disruptions in a Pandemic</a>
Martin Bodenstein, Giancarlo Corsetti, and Luca Guerrieri</p>

<p><a href="https://www.federalreserve.gov/econres/feds/files/2020030pap.pdf" rel="nofollow noreferrer">Tracking Labor Market Developments during the COVID-19 Pandemic: A Preliminary Assessment</a></p>

<p>Tomaz Cajner, Leland D. Crane, Ryan A. Decker, Adrian Hamins-Puertolas, Christopher Kurz  (please note that the results are very preliminary)</p>

<hr>

<p>Another article from the Bureau of Labor Statistics strait off the press:</p>

<p>"How many workers are employed in sectors directly affected by COVID-19 shutdowns, where do they work, and how much do they earn?"  Day and Loewenstein. </p>

<p><a href="https://www.bls.gov/opub/mlr/2020/article/covid-19-shutdowns.htm" rel="nofollow noreferrer">https://www.bls.gov/opub/mlr/2020/article/covid-19-shutdowns.htm</a></p>

CC BY-SA 4.0
2020-04-17T15:36:04.910Z
2020-04-23T14:06:48.203Z
2020-04-23T14:06:48.203Z
Mike J
<p>With the right keywords (and author searches) from earlier papers, I actually found some academic output already; this might not be peer-reviewed yet, i.e. preprints:</p>

<ul>
<li><p>McKibbin and Fernando (2 March 2020) <a href="https://www.brookings.edu/wp-content/uploads/2020/03/20200302_COVID19.pdf" rel="nofollow noreferrer">The Global Macroeconomic Impacts of COVID-19: Seven Scenarios</a></p>

<blockquote>
  <p>examines the impacts of different scenarios on macroeconomic outcomes and
  financial markets in a global hybrid DSGE/CGE general equilibrium model.
  The scenarios in this paper demonstrate that even a contained outbreak could significantly
  impact the global economy in the short run. [...]
  These results are very sensitive to the assumptions in the model, to the shocks we feed in and
  to the assumed macroeconomic policy responses in each country.</p>
</blockquote></li>
<li><p>And that's already cited by Wang et al. <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3554638" rel="nofollow noreferrer">COVID-19's Impact on China's Economy Based on Data of Spring Festival Travel Rush</a></p>

<blockquote>
  <p>this paper starts with the analysis of the daily railway passenger volume data during the Spring Festival travel rush, and establishes three time series to model the railway passenger volume, GDP in the first quarter model, and GDP in the last three quarters respectively. The forecast results indicate that: (a) Affected by the epidemic, China’s economy will lose 4.8 trillion yuan in the first quarter of 2020, which is an expected decrease of 20.69% and a year-on-year drop of 15.60%; (b) China's expected GDP growth rate for the full year of 2020 will reduce from 6.50% to 1.72%. However, there are some positive factors not taken into account in these models, which means that the forecast results may be underestimated. With the global spread of the epidemic, the instability of the world economy will in turn impact China’s economy.</p>
</blockquote></li>
<li><p>A more recent (March 30) paper, <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3561244" rel="nofollow noreferrer">Greenstone and Nigam</a> that emphasizes/quantifies the benefits of the lockdowns, in the US:</p>

<blockquote>
  <p>Using the Ferguson et al. (2020) simulation model of COVID-19’s spread and mortality impacts in the United States, we project that 3-4 months of moderate distancing beginning in late March 2020 would save 1.7 million lives by October 1. Of the lives saved, 630,000 are due to avoided overwhelming of hospital intensive care units. Using the projected age-specific reductions in death and age-varying estimates of the United States Government’s value of a statistical life, we find that the mortality benefits of social distancing are about \$8 trillion or $60,000 per US household. Roughly 90% of the monetized benefits are projected to accrue to people age 50 or older. Overall, the analysis suggests that social distancing initiatives and policies in response to the COVID-19 epidemic have substantial economic benefits.</p>
</blockquote></li>
</ul>

<hr>

<p>JP Morgan has put out <a href="https://www.jpmorgan.com/global/research/coronavirus-impact" rel="nofollow noreferrer">some estimates</a> already, although they don't detail their methodology as much as a peer-reviewed publication would (have to).</p>

<blockquote>
  <p>The U.S. economy is projected to contract by 14% in the second quarter, after experiencing a 4% contraction in the first quarter, before recovering to 8% and 4% growth in the third and fourth quarters. Euro area GDP will suffer an even deeper contraction, with double-digit declines of 15% and 22% in the first and second quarters, before rebounding by 45% and 3.5% in the third and fourth quarters.</p>
  
  <p>“There is no longer doubt that the longest global expansion on record will end this quarter. We now think that the COVID-19 shock will produce a global recession, as nearly all of the world contracts over the three months between February and April,” said Bruce Kasman, Chief Economist at J.P. Morgan. Initially, the expectation was the novel-recession may generate limited labor market damage, but J.P. Morgan Research is now forecasting the unemployment rate for developed markets as a whole will rise 1.6 percentage points in the next two quarters.</p>
  
  <p>“The rise in unemployment will be sharper in the U.S. than in the Euro area. Most immediately, U.S. initial jobless claims should spike above 400,000 in the coming weeks,” said Michael Feroli, Chief U.S. economist at J.P. Morgan.</p>
</blockquote>

<p>McKinsey has a somewhat spread-out <a href="https://www.mckinsey.com/~/media/mckinsey/business%20functions/risk/our%20insights/covid%2019%20implications%20for%20business/covid%2019%20march%2025/covid-19-facts-and-insights-march-25-vf.ashx" rel="nofollow noreferrer">(March 25) presentation</a>, but a couple of slides with their scenarios/estimates I could fish from there:</p>

<p><a href="https://i.sstatic.net/YsQeZ.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/YsQeZ.png" alt="enter image description here"></a>
<a href="https://i.sstatic.net/87Z3O.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/87Z3O.png" alt="enter image description here"></a></p>

<p>Likewise, PWC has a March [white]paper mostly focused <a href="https://www.pwc.com.au/publications/australia-matters/economic-consequences-coronavirus-COVID-19-pandemic.pdf" rel="nofollow noreferrer">on Australia</a>... but which does come with a global map attached of their estimates of GDP losses, alas in absolute figures only (and I think over one year based on what they say on the previous slide):</p>

<p><a href="https://i.sstatic.net/h5ZnV.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/h5ZnV.png" alt="enter image description here"></a></p>

<hr>

<p>Before the COVID-19 outbreak, there has been a niche academic domain of estimating the economic impact of pandemics already, typically using a CGE model. Results depend of course on the assumptions used. E.g. Smith, Keogh-Brown et al. had a series of papers approximately a decade ago. Quoting from a <a href="https://link.springer.com/article/10.1007/s10198-009-0210-1" rel="nofollow noreferrer">later one</a> that covered more than one European country:</p>

<blockquote>
  <p>Results suggest GDP losses from the disease of approximately 0.5–2% but school closure and prophylactic absenteeism more than triples these effects.</p>
</blockquote>

<p>So they went as high ~10% GDP losses. While they did not envisage government mandated lockdown(s), they modelled "prophylactic absenteeism" in response to ~3% death rate media reports as the most severe case. An earlier paper of theirs, on UK only is <a href="https://www.bmj.com/content/339/bmj.b4571" rel="nofollow noreferrer">open-access in the BMJ</a>. Quoting their assumption from there</p>

<blockquote>
  <p>almost everybody in the population will know someone who has died once the mortality rate reaches one death per 300 people, triggering prophylactic absenteeism.</p>
</blockquote>

<p>The same authors (Keogh-Brown and Smith) also <a href="https://doi.org/10.1016/j.healthpol.2008.03.003" rel="nofollow noreferrer">published in 2008</a> a fairly detailed post-hoc account of how economic predictions for SARS fared in hindsight... which generally wasn't all that good, meaning that most models overestimated the economic impact of SARS. It cites positively an <a href="https://www.adb.org/publications/sars-economic-impacts-and-implications" rel="nofollow noreferrer">2003 ADB paper of Fan</a> that hedged its bets on two different scenarios (early containment being one of them).</p>

<p>Another paper <a href="http://create.usc.edu/sites/default/files/publications/assessingregionalrisksfrompandemicinfluenza-ascenarioanalysis.pdf" rel="nofollow noreferrer">Verikios et al. (2015)</a> in a similar vein but attempts a global estimate (GTAP CGE), and also discussed prior/related work:</p>

<blockquote>
  <p>The two pandemic scenarios modelled give quantitatively and qualitatively different
  results. [...] Our results show that the peak GDP effects on the world economy of an influenza pandemic are in the range 0.06 to 1.01 per cent in the peak year depending on the nature of the pandemic. Our results are smaller than the only previous estimates of the global economic effects of influenza pandemics by McKibbin and Sidorenko (2006). They estimate reductions in global GDP of between 0.8 and 12.6 per cent depending on the severity of the pandemic. Our results are not directly comparable to McKibbin and Sidorenko as they did not model a continuum of pandemic scenarios across the virulence-infectiousness continuum. Rather, they assume a given reproducibility of the virus (infectiousness) and vary virulence across their four scenarios. Further, they implicitly assume multiple waves for all their scenarios as they presume that
  new infections continue to occur for greater than one year. This is likely to characterise only more extreme pandemics (such as the 1918–19 flu) rather than milder pandemics. Differences in the range of influenza pandemics modelled by us and McKibbin and Sidorenko are justifiable given the uncertain nature of future pandemics. Our results thus build upon the findings of McKibbin and Sidorenko by extending the estimation of potential GDP estimates over a further range of potential pandemic threat scenarios.</p>
  
  <p>[...] Our results show that the global macroeconomic effects of an influenza pandemic may be significant but are also likely to be short-lived. The largest economic impacts of an influenza pandemic are driven by reduced international tourism, due to risk-modifying measures by households and travel restrictions imposed by health authorities, and lost workdays, due to illness or formal social distancing measures designed to contain the virus. This is consistent with the work of Keogh-Brown et al. (2009, 2010). [...] </p>
</blockquote>

<p>Verikios seems to work for KPMG Australia nowadays and they have <a href="https://assets.kpmg/content/dam/kpmg/au/pdf/2020/potential-impact-covid-19-on-the-australian-economy.pdf" rel="nofollow noreferrer">released</a> a COVID-19 model that is fairly detailed in explaining its assumptions, for example it has separate pre- and post-stimulus arms/scenarios, but it mostly covers the Australian case, in particular only models the government response of that country.</p>

<p>KPMG uses a <a href="https://nimodel.niesr.ac.uk/" rel="nofollow noreferrer">NiGEM</a> (New-Keynesian) macro model, and they've basically tweaked some parameters of this using estimates of shocks in four areas: reduction in productivity due to additional sick leave by workers, reduction in productivity due to additional carer’s leave by workers, incremental investment premium, capacity utilisation adjustment (i.e. supply chain disruptions). The first two were informed by fairly detailed labour &amp; health statistics, the latter two seem a bit more arbitrary to me, e.g. they added a flat 1% investment premium.</p>

<hr>

<p>I was hoping the IMF would have something more concrete <a href="https://www.taipeitimes.com/News/biz/archives/2020/03/25/2003733308" rel="nofollow noreferrer">than this</a>, but I guess
they are weary of advancing anything more detailed yet:</p>

<blockquote>
  <p>The COVID-19 pandemic would cause a global recession in 2020 that could be worse than the one triggered by the 2008-2009 global financial crisis, but world economic output should recover in 2021, the IMF said on Monday.</p>
  
  <p>Georgieva issued the new outlook after a conference call of G20 finance ministers and central bankers, who she said agreed on the need for solidarity across the globe. [...]</p>
  
  <p>The outlook for global growth is negative and the IMF expects “a recession at least as bad as during the global financial crisis, or worse,” Georgieva said.</p>
  
  <p>Earlier this month, Georgieva had warned that 2020 world growth would be below last year’s 2.9 percent rate, but stopped short of predicting a recession.</p>
  
  <p>Georgieva on Monday said that a recovery is expected in 2021, but to reach it, countries would need to prioritize containment and strengthen health systems.</p>
  
  <p>“The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be,” she said.</p>
</blockquote>

<p>The CBO has now <a href="https://www.cbo.gov/publication/56314" rel="nofollow noreferrer">posted</a> its own assessment for the US economy. It disclaims that it is "highly uncertain, especially for later periods", but basically, for the second quarter of 2020 it predicts 10 percent unemployment and the economy to contract by "more than" 7 percent.</p>

<p>The WTO Secretariat has <a href="https://www.wto.org/english/news_e/pres20_e/pr855_e.htm" rel="nofollow noreferrer">posted</a> this self-explanatory chart on April 8:</p>

<p><a href="https://i.sstatic.net/8qeBM.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/8qeBM.png" alt="enter image description here"></a></p>

CC BY-SA 4.0
2020-03-30T16:04:39.390Z
Very interesting.  Great find!    Thank you
Mike J
CC BY-SA 4.0
2020-03-26T02:42:28.743Z
2020-04-11T12:29:21.070Z
2020-04-11T12:29:21.070Z
fantastic peace and prosperity
<p>People are concerned about the economic impacts of the virus. How severe will the economic downturn be? Will the coronavirus cause a global recession worse than the 2008 crisis?
I'm not looking here for speculative answers, but references with a solid economic background. For example, I found these:</p>

<ul>
<li><a href="https://drive.google.com/file/d/1mwMDiPQK88x27JznMkWzEQpUVm8Vb4WI/view" rel="nofollow noreferrer">Flattening the Pandemic and Recession Curves</a>, March 13 2020, by Pierre-Olivier Gourinchas, Berkeley.</li>
<li><a href="https://voxeu.org/debates/economics-time-covid-19" rel="nofollow noreferrer">Economics in the Time of Covid-19</a>, by Vox CEPR.</li>
</ul>

<p>Any other (academic) references?</p>

<hr>

<p>Economics podcasts are also welcome. I found those:</p>

<ul>
<li><a href="https://conversationswithtyler.com/episodes/russ-roberts-and-tyler/" rel="nofollow noreferrer">Russ Roberts and Tyler Cowen on COVID-19</a></li>
<li><a href="https://freakonomics.com/podcast/covid-19-effects/" rel="nofollow noreferrer">The Side Effects of Social Distancing</a> by Freakeconomics</li>
<li>And a bunch of recent episodes by <a href="https://www.npr.org/podcasts/510289/planet-money?t=1585132658418" rel="nofollow noreferrer">Planet Money</a>.</li>
</ul>

<hr>

<p>Update.</p>

<p>Some nice references on <a href="https://siepr.stanford.edu/news/following-economic-impact-covid-19" rel="nofollow noreferrer">Following the economic impact of COVID-19</a> by Stanford (SIEPR) experts.</p>

<hr>

<p>Last update: On the weekly NBER Working papers released by April 13, 2020, there is already a lot of material on covid-19!</p>

<ul>
<li><a href="https://www.nber.org/papers/w26990" rel="nofollow noreferrer">The Geographic Spread of COVID-19 Correlates with Structure of Social Networks as Measured by Facebook</a>,  T. Kuchler, D. Russel, and J. Stroebel.</li>
<li><a href="https://www.nber.org/papers/w26989" rel="nofollow noreferrer">How Are Small Businesses Adjusting to COVID-19? Early Evidence from a Survey</a>, A.W. Bartik, M. Bertrand, Z.B. Cullen, E.L. Glaeser, M. Luca, and C.T. Stanton.</li>
<li><a href="https://www.nber.org/papers/w26987" rel="nofollow noreferrer">Covid19 and the Macroeconomic Effects of Costly Disasters</a>, S.C. Ludvigson, S. Ma, and S. Ng.</li>
<li><a href="https://www.nber.org/papers/w26984" rel="nofollow noreferrer">Optimal Mitigation Policies in a Pandemic: Social Distancing and Working from Home</a> C.J. Jones, T. Philippon, and V.Venkateswaran #26984</li>
<li><a href="https://www.nber.org/papers/w26983" rel="nofollow noreferrer">COVID-Induced Economic Uncertainty</a>, S.R. Baker, N. Bloom,
S.J. Davis, and S.J. Terry.</li>
<li><a href="https://www.nber.org/papers/w26982" rel="nofollow noreferrer">Social Distancing, Internet Access and Inequality</a>, L. Chiou and
C. Tucker.</li>
<li><a href="https://www.nber.org/papers/w26982" rel="nofollow noreferrer">A Simple Planning Problem for COVID-19 Lockdown</a>, F.E. Alvarez, D. Argente, and F. Lippi.    </li>
<li><a href="https://www.nber.org/papers/w26971" rel="nofollow noreferrer">Firm-level Exposure to Epidemic Diseases: Covid-19, SARS, and H1N1</a>,    T.A. Hassan, S. Hollander, L. van Lent, and A. Tahoun.</li>
<li><a href="https://www.nber.org/papers/w26954" rel="nofollow noreferrer">U.S. Economic Activity During the Early Weeks of the SARS-Cov-2
Outbreak</a>, D. Lewis, K. Mertens, and J.H. Stock.</li>
<li><a href="https://www.nber.org/papers/w26952" rel="nofollow noreferrer">Demographic Determinants of Testing Incidence and COVID-19 Infections
in New York City Neighborhoods</a>, G.J. Borjas.</li>
<li><a href="https://www.nber.org/papers/w26951" rel="nofollow noreferrer">Triage Protocol Design for Ventilator Rationing in a Pandemic:    Integrating Multiple Ethical Values through Reserves</a>, P.A. Pathak, T. Sönmez, M. Utku Unver, and M. B. Yenmez.     </li>
<li><a href="https://www.nber.org/papers/w26946" rel="nofollow noreferrer">Polarization and Public Health: Partisan Differences in Social
Distancing during the Coronavirus Pandemic</a>, H. Allcott, L. Boxell, J.C. Conway, M. Gentzkow, M. Thaler, and D.Y. Yang.</li>
</ul>

CC BY-SA 4.0
2020-03-25T15:15:50.977Z
Clarify what you want references about. Obviously lockdowns shut down economic activity. You want academic references on this?
Frank
CC BY-SA 4.0
2020-03-25T17:40:10.840Z
I suspect soon enough there will be so much material about this the question might quickly become too broad. Just look at the CEPR discussion for a hint... There's already a giant Wikipedia page https://en.wikipedia.org/wiki/Socio-economic_impact_of_the_2019%E2%80%9320_coronavirus_pandemic I don't know if you conside JP Morgan academic enough or not but they put out some estimates https://www.jpmorgan.com/global/research/coronavirus-impact
fantastic peace and prosperity
CC BY-SA 4.0
2020-03-25T18:07:31.157Z
Interesting enough, a [2009 CGE paper](https://www.bmj.com/content/339/bmj.b4571) predicted losses (in a generic pandemic) somewhat similar to present covid-19 predictions. That paper did not predict lockdowns but "prophylactic absenteeism",,, which seems to me turned out to be more or less the same thing.
fantastic peace and prosperity
CC BY-SA 4.0
2020-03-27T18:15:08.687Z
IMF and most other economists I have seen predict a recession worse than the financial crisis in 2008. The most common comparison is perhaps 1930. Goldman Sachs and Morgan Stanley predicts a GDP fall in the US of 24–30% in Q2. That is worse than it took GDP fall during three years in the great depression between 1929–1932. We have more sensible monetary policy now than then, so hopefully it is less severe than that, but there are no way this will look great even if restrictions where lifted today.
JonT
<reference-request><economic-crisis><covid-19-crisis>
The Economics of Coronavirus
emeryville
# The Economics of Coronavirus

(Asked by: username_0 on 2020-03-25)

People are concerned about the economic impacts of the virus. How severe will the economic downturn be? Will the coronavirus cause a global recession worse than the 2008 crisis?
I'm not looking here for speculative answers, but references with a solid economic background. For example, I found these:

* [Flattening the Pandemic and Recession Curves](https://drive.google.com/file/d/1mwMDiPQK88x27JznMkWzEQpUVm8Vb4WI/view), March 13 2020, by Pierre-Olivier Gourinchas, Berkeley.
* [Economics in the Time of Covid-19](https://voxeu.org/debates/economics-time-covid-19), by Vox CEPR.

Any other (academic) references?

---

Economics podcasts are also welcome. I found those:

* [Russ Roberts and Tyler Cowen on COVID-19](https://conversationswithtyler.com/episodes/russ-roberts-and-tyler/)
* [The Side Effects of Social Distancing](https://freakonomics.com/podcast/covid-19-effects/) by Freakeconomics
* And a bunch of recent episodes by [Planet Money](https://www.npr.org/podcasts/510289/planet-money?t=1585132658418).

---

Update.

Some nice references on [Following the economic impact of COVID-19](https://siepr.stanford.edu/news/following-economic-impact-covid-19) by Stanford (SIEPR) experts.

---

Last update: On the weekly NBER Working papers released by April 13, 2020, there is already a lot of material on covid-19!

* [The Geographic Spread of COVID-19 Correlates with Structure of Social Networks as Measured by Facebook](https://www.nber.org/papers/w26990), T. Kuchler, D. Russel, and J. Stroebel.
* [How Are Small Businesses Adjusting to COVID-19? Early Evidence from a Survey](https://www.nber.org/papers/w26989), A.W. Bartik, M. Bertrand, Z.B. Cullen, E.L. Glaeser, M. Luca, and C.T. Stanton.
* [Covid19 and the Macroeconomic Effects of Costly Disasters](https://www.nber.org/papers/w26987), S.C. Ludvigson, S. Ma, and S. Ng.
* [Optimal Mitigation Policies in a Pandemic: Social Distancing and Working from Home](https://www.nber.org/papers/w26984) C.J. Jones, T. Philippon, and V.Venkateswaran #26984
* [COVID-Induced Economic Uncertainty](https://www.nber.org/papers/w26983), S.R. Baker, N. Bloom,
  S.J. Davis, and S.J. Terry.
* [Social Distancing, Internet Access and Inequality](https://www.nber.org/papers/w26982), L. Chiou and
  C. Tucker.
* [A Simple Planning Problem for COVID-19 Lockdown](https://www.nber.org/papers/w26982), F.E. Alvarez, D. Argente, and F. Lippi.
* [Firm-level Exposure to Epidemic Diseases: Covid-19, SARS, and H1N1](https://www.nber.org/papers/w26971), T.A. Hassan, S. Hollander, L. van Lent, and A. Tahoun.
* [U.S. Economic Activity During the Early Weeks of the SARS-Cov-2
  Outbreak](https://www.nber.org/papers/w26954), D. Lewis, K. Mertens, and J.H. Stock.
* [Demographic Determinants of Testing Incidence and COVID-19 Infections
  in New York City Neighborhoods](https://www.nber.org/papers/w26952), G.J. Borjas.
* [Triage Protocol Design for Ventilator Rationing in a Pandemic: Integrating Multiple Ethical Values through Reserves](https://www.nber.org/papers/w26951), P.A. Pathak, T. Sönmez, M. Utku Unver, and M. B. Yenmez.
* [Polarization and Public Health: Partisan Differences in Social
  Distancing during the Coronavirus Pandemic](https://www.nber.org/papers/w26946), H. Allcott, L. Boxell, J.C. Conway, M. Gentzkow, M. Thaler, and D.Y. Yang.

**Tags:** reference-request, economic-crisis, covid-19-crisis
> **Comments:**
> **username_1**: Clarify what you want references about. Obviously lockdowns shut down economic activity. You want academic references on this?  
> **username_2**: I suspect soon enough there will be so much material about this the question might quickly become too broad. Just look at the CEPR discussion for a hint... There's already a giant Wikipedia page https://en.wikipedia.org/wiki/Socio-economic_impact_of_the_2019%E2%80%9320_coronavirus_pandemic I don't know if you conside JP Morgan academic enough or not but they put out some estimates https://www.jpmorgan.com/global/research/coronavirus-impact  
> **username_2**: Interesting enough, a [2009 CGE paper](https://www.bmj.com/content/339/bmj.b4571) predicted losses (in a generic pandemic) somewhat similar to present covid-19 predictions. That paper did not predict lockdowns but "prophylactic absenteeism",,, which seems to me turned out to be more or less the same thing.  
> **username_3**: IMF and most other economists I have seen predict a recession worse than the financial crisis in 2008. The most common comparison is perhaps 1930. Goldman Sachs and Morgan Stanley predicts a GDP fall in the US of 24–30% in Q2. That is worse than it took GDP fall during three years in the great depression between 1929–1932. We have more sensible monetary policy now than then, so hopefully it is less severe than that, but there are no way this will look great even if restrictions where lifted today.  

---

## 2 answers

### Answer by username_2 on 2020-03-26. Score: 8 | Accepted answer

With the right keywords (and author searches) from earlier papers, I actually found some academic output already; this might not be peer-reviewed yet, i.e. preprints:

* McKibbin and Fernando (2 March 2020) [The Global Macroeconomic Impacts of COVID-19: Seven Scenarios](https://www.brookings.edu/wp-content/uploads/2020/03/20200302_COVID19.pdf)

  > examines the impacts of different scenarios on macroeconomic outcomes and
  > financial markets in a global hybrid DSGE/CGE general equilibrium model.
  > The scenarios in this paper demonstrate that even a contained outbreak could significantly
  > impact the global economy in the short run. [...]
  > These results are very sensitive to the assumptions in the model, to the shocks we feed in and
  > to the assumed macroeconomic policy responses in each country.
* And that's already cited by Wang et al. [COVID-19's Impact on China's Economy Based on Data of Spring Festival Travel Rush](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3554638)

  > this paper starts with the analysis of the daily railway passenger volume data during the Spring Festival travel rush, and establishes three time series to model the railway passenger volume, GDP in the first quarter model, and GDP in the last three quarters respectively. The forecast results indicate that: (a) Affected by the epidemic, China’s economy will lose 4.8 trillion yuan in the first quarter of 2020, which is an expected decrease of 20.69% and a year-on-year drop of 15.60%; (b) China's expected GDP growth rate for the full year of 2020 will reduce from 6.50% to 1.72%. However, there are some positive factors not taken into account in these models, which means that the forecast results may be underestimated. With the global spread of the epidemic, the instability of the world economy will in turn impact China’s economy.
* A more recent (March 30) paper, [Greenstone and Nigam](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3561244) that emphasizes/quantifies the benefits of the lockdowns, in the US:

  > Using the Ferguson et al. (2020) simulation model of COVID-19’s spread and mortality impacts in the United States, we project that 3-4 months of moderate distancing beginning in late March 2020 would save 1.7 million lives by October 1. Of the lives saved, 630,000 are due to avoided overwhelming of hospital intensive care units. Using the projected age-specific reductions in death and age-varying estimates of the United States Government’s value of a statistical life, we find that the mortality benefits of social distancing are about \$8 trillion or $60,000 per US household. Roughly 90% of the monetized benefits are projected to accrue to people age 50 or older. Overall, the analysis suggests that social distancing initiatives and policies in response to the COVID-19 epidemic have substantial economic benefits.

---

JP Morgan has put out [some estimates](https://www.jpmorgan.com/global/research/coronavirus-impact) already, although they don't detail their methodology as much as a peer-reviewed publication would (have to).

> The U.S. economy is projected to contract by 14% in the second quarter, after experiencing a 4% contraction in the first quarter, before recovering to 8% and 4% growth in the third and fourth quarters. Euro area GDP will suffer an even deeper contraction, with double-digit declines of 15% and 22% in the first and second quarters, before rebounding by 45% and 3.5% in the third and fourth quarters.
>
> “There is no longer doubt that the longest global expansion on record will end this quarter. We now think that the COVID-19 shock will produce a global recession, as nearly all of the world contracts over the three months between February and April,” said Bruce Kasman, Chief Economist at J.P. Morgan. Initially, the expectation was the novel-recession may generate limited labor market damage, but J.P. Morgan Research is now forecasting the unemployment rate for developed markets as a whole will rise 1.6 percentage points in the next two quarters.
>
> “The rise in unemployment will be sharper in the U.S. than in the Euro area. Most immediately, U.S. initial jobless claims should spike above 400,000 in the coming weeks,” said Michael Feroli, Chief U.S. economist at J.P. Morgan.

McKinsey has a somewhat spread-out [(March 25) presentation](https://www.mckinsey.com/~/media/mckinsey/business%20functions/risk/our%20insights/covid%2019%20implications%20for%20business/covid%2019%20march%2025/covid-19-facts-and-insights-march-25-vf.ashx), but a couple of slides with their scenarios/estimates I could fish from there:

[![enter image description here](https://i.sstatic.net/YsQeZ.png)](https://i.sstatic.net/YsQeZ.png)
[![enter image description here](https://i.sstatic.net/87Z3O.png)](https://i.sstatic.net/87Z3O.png)

Likewise, PWC has a March [white]paper mostly focused [on Australia](https://www.pwc.com.au/publications/australia-matters/economic-consequences-coronavirus-COVID-19-pandemic.pdf)... but which does come with a global map attached of their estimates of GDP losses, alas in absolute figures only (and I think over one year based on what they say on the previous slide):

[![enter image description here](https://i.sstatic.net/h5ZnV.png)](https://i.sstatic.net/h5ZnV.png)

---

Before the COVID-19 outbreak, there has been a niche academic domain of estimating the economic impact of pandemics already, typically using a CGE model. Results depend of course on the assumptions used. E.g. Smith, Keogh-Brown et al. had a series of papers approximately a decade ago. Quoting from a [later one](https://link.springer.com/article/10.1007/s10198-009-0210-1) that covered more than one European country:

> Results suggest GDP losses from the disease of approximately 0.5–2% but school closure and prophylactic absenteeism more than triples these effects.

So they went as high ~10% GDP losses. While they did not envisage government mandated lockdown(s), they modelled "prophylactic absenteeism" in response to ~3% death rate media reports as the most severe case. An earlier paper of theirs, on UK only is [open-access in the BMJ](https://www.bmj.com/content/339/bmj.b4571). Quoting their assumption from there

> almost everybody in the population will know someone who has died once the mortality rate reaches one death per 300 people, triggering prophylactic absenteeism.

The same authors (Keogh-Brown and Smith) also [published in 2008](https://doi.org/10.1016/j.healthpol.2008.03.003) a fairly detailed post-hoc account of how economic predictions for SARS fared in hindsight... which generally wasn't all that good, meaning that most models overestimated the economic impact of SARS. It cites positively an [2003 ADB paper of Fan](https://www.adb.org/publications/sars-economic-impacts-and-implications) that hedged its bets on two different scenarios (early containment being one of them).

Another paper [Verikios et al. (2015)](http://create.usc.edu/sites/default/files/publications/assessingregionalrisksfrompandemicinfluenza-ascenarioanalysis.pdf) in a similar vein but attempts a global estimate (GTAP CGE), and also discussed prior/related work:

> The two pandemic scenarios modelled give quantitatively and qualitatively different
> results. [...] Our results show that the peak GDP effects on the world economy of an influenza pandemic are in the range 0.06 to 1.01 per cent in the peak year depending on the nature of the pandemic. Our results are smaller than the only previous estimates of the global economic effects of influenza pandemics by McKibbin and Sidorenko (2006). They estimate reductions in global GDP of between 0.8 and 12.6 per cent depending on the severity of the pandemic. Our results are not directly comparable to McKibbin and Sidorenko as they did not model a continuum of pandemic scenarios across the virulence-infectiousness continuum. Rather, they assume a given reproducibility of the virus (infectiousness) and vary virulence across their four scenarios. Further, they implicitly assume multiple waves for all their scenarios as they presume that
> new infections continue to occur for greater than one year. This is likely to characterise only more extreme pandemics (such as the 1918–19 flu) rather than milder pandemics. Differences in the range of influenza pandemics modelled by us and McKibbin and Sidorenko are justifiable given the uncertain nature of future pandemics. Our results thus build upon the findings of McKibbin and Sidorenko by extending the estimation of potential GDP estimates over a further range of potential pandemic threat scenarios.
>
> [...] Our results show that the global macroeconomic effects of an influenza pandemic may be significant but are also likely to be short-lived. The largest economic impacts of an influenza pandemic are driven by reduced international tourism, due to risk-modifying measures by households and travel restrictions imposed by health authorities, and lost workdays, due to illness or formal social distancing measures designed to contain the virus. This is consistent with the work of Keogh-Brown et al. (2009, 2010). [...]

Verikios seems to work for KPMG Australia nowadays and they have [released](https://assets.kpmg/content/dam/kpmg/au/pdf/2020/potential-impact-covid-19-on-the-australian-economy.pdf) a COVID-19 model that is fairly detailed in explaining its assumptions, for example it has separate pre- and post-stimulus arms/scenarios, but it mostly covers the Australian case, in particular only models the government response of that country.

KPMG uses a [NiGEM](https://nimodel.niesr.ac.uk/) (New-Keynesian) macro model, and they've basically tweaked some parameters of this using estimates of shocks in four areas: reduction in productivity due to additional sick leave by workers, reduction in productivity due to additional carer’s leave by workers, incremental investment premium, capacity utilisation adjustment (i.e. supply chain disruptions). The first two were informed by fairly detailed labour & health statistics, the latter two seem a bit more arbitrary to me, e.g. they added a flat 1% investment premium.

---

I was hoping the IMF would have something more concrete [than this](https://www.taipeitimes.com/News/biz/archives/2020/03/25/2003733308), but I guess
they are weary of advancing anything more detailed yet:

> The COVID-19 pandemic would cause a global recession in 2020 that could be worse than the one triggered by the 2008-2009 global financial crisis, but world economic output should recover in 2021, the IMF said on Monday.
>
> Georgieva issued the new outlook after a conference call of G20 finance ministers and central bankers, who she said agreed on the need for solidarity across the globe. [...]
>
> The outlook for global growth is negative and the IMF expects “a recession at least as bad as during the global financial crisis, or worse,” Georgieva said.
>
> Earlier this month, Georgieva had warned that 2020 world growth would be below last year’s 2.9 percent rate, but stopped short of predicting a recession.
>
> Georgieva on Monday said that a recovery is expected in 2021, but to reach it, countries would need to prioritize containment and strengthen health systems.
>
> “The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be,” she said.

The CBO has now [posted](https://www.cbo.gov/publication/56314) its own assessment for the US economy. It disclaims that it is "highly uncertain, especially for later periods", but basically, for the second quarter of 2020 it predicts 10 percent unemployment and the economy to contract by "more than" 7 percent.

The WTO Secretariat has [posted](https://www.wto.org/english/news_e/pres20_e/pr855_e.htm) this self-explanatory chart on April 8:

[![enter image description here](https://i.sstatic.net/8qeBM.png)](https://i.sstatic.net/8qeBM.png)

> **Comments:**
> **username_4**: Very interesting.  Great find!    Thank you  

---

### Answer by username_4 on 2020-04-17. Score: 0

Just wanted to add that the economists at the Federal Reserve Board of Governors have posted some new papers this month (April). The new papers can be found here:
<https://www.federalreserve.gov/econres/feds/>

[Social Distancing and Supply Disruptions in a Pandemic](https://www.federalreserve.gov/econres/feds/files/2020031pap.pdf)
Martin Bodenstein, Giancarlo Corsetti, and Luca Guerrieri

[Tracking Labor Market Developments during the COVID-19 Pandemic: A Preliminary Assessment](https://www.federalreserve.gov/econres/feds/files/2020030pap.pdf)

Tomaz Cajner, Leland D. Crane, Ryan A. Decker, Adrian Hamins-Puertolas, Christopher Kurz (please note that the results are very preliminary)

---

Another article from the Bureau of Labor Statistics strait off the press:

"How many workers are employed in sectors directly affected by COVID-19 shutdowns, where do they work, and how much do they earn?" Day and Loewenstein.

<https://www.bls.gov/opub/mlr/2020/article/covid-19-shutdowns.htm>


---

