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http://dx.doi.org/10.15266/KEREA.2021.30.1.027

The Effects of COVID-19 Diffusion in the Korean Economy: Using SIR-based Macro-Epidemiological Model  

Choi, Bongseok (Department of Commerce and Finance, Kookmin University)
Park, Hojeong (Department of Food and Resource Economics, Korea University)
Publication Information
Environmental and Resource Economics Review / v.30, no.1, 2021 , pp. 27-48 More about this Journal
Abstract
We extend and modify the canonical epidemiology model of Eichenbaum, Rebelo and Trabandt (2020) to investigate the general equilibrium effects of COVID-19 spread in the Korean economy when vaccine, treatment and social distancing are available. Particularly, we develop a SIR-macro model which considers possibility of moral inattention of the overconfident agents through which people is more likely to be infected. Our model implies that people's decision to cut back on consumption and work reduces the severity of the epidemic and thus exacerbate the size of the economic recession caused by the epidemic. Another finding is that the average 13 weeks to develop the vaccine and treatment will lead to 2% drop of consumption.
Keywords
Containment; COVID-19; epidemic; immunity; quarantine; testing;
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