Health Accelerator and Financial Frictions in Macroeconomic Modelling
In this paper, we have developed a new approach to macroeconomic modelling by proposing to introduce the agent’s behaviour in a pandemic situation. In the form of health frictions that alter the economic agent’s behaviour in crisis situations, we have set up a DSGE model whose behavioural functions...
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| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
SAGE Publishing
2025-03-01
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| Series: | SAGE Open |
| Online Access: | https://doi.org/10.1177/21582440251325304 |
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| Summary: | In this paper, we have developed a new approach to macroeconomic modelling by proposing to introduce the agent’s behaviour in a pandemic situation. In the form of health frictions that alter the economic agent’s behaviour in crisis situations, we have set up a DSGE model whose behavioural functions take into account the existence of healthy and infected populations. The novelty of this work is the inclusion of the two frictions; health and financial, the idea is to succeed in describing the macro-financial dynamics in a pandemic situation. The results obtained confirm the existence of a health accelerator that amplifies macroeconomic shocks. JEL classification: G21, G28, E42, E32 |
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| ISSN: | 2158-2440 |