An Updated Assessment of the Economic Impact of COVID-19
This policy brief explores the potential economic impacts of the
COVID-19 outbreak using the Global Trade Analysis Project
(GTAP) Model, a multiregion computable general equilibrium
model. The analysis incorporates three known and measurable
channels: (i) an increase in trade costs that affects the movement
of people and inbound tourism, along with industries linked to
global supply chains; (ii) a negative supply-side productivity shock
that cuts wages and corporate earnings, leading to reductions in
consumption and investment; and (iii) fiscal stimulus through
various macroeconomic policy instruments.