Leçons macroéconomiques de la Covid-19: une analyse pour la RDC

UMBA, Gilles Bertrand and SIASI, Yves and LUMBALA, Grégoire (2020): Leçons macroéconomiques de la Covid-19: une analyse pour la RDC.

Abstract

This work aims at studying the macroeconomic impact of COVID-19 on the activity economic in DR Congo. To do this, a dynamic and stochastic general equilibrium model in the open economy is used and the model parameters are estimated using the Bayesian approach. The estimated data cover the period from the first quarter 2012 in the second quarter of 2020. The diagnostic tests, in particular the convergence test Monte-Carlo Markov chains (MCMC) lead to consider that the parameters are reliable. The results indicate that: (i) the COVID-19 shock would lead to a significant drop in the output gap until the 8th trimester after the incurrence of the shock; (ii) the level of consumption also suffers a downside effect following the health crisis up to more than 10 quarters after the shock; (iii) The nominal exchange rate also depreciates with a more and more attenuated from the 6th quarter after the shock, and (iv) the term of exchange suffers also from a negative effect but with a larger confidence interval, which could possibly reflect a potentially significant effect following the interruption of trade resulting from the measures of confinement.

• Item Type: MPRA Paper
• English Title: Macroeconomic Lessons from Covid-19: An Analysis for DRC
• Language: French
• Keywords: Macroeconomics, COVID-19, growth
• Subjects: F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies; F - International Economics > F6 - Economic Impacts of Globalization > F62 - Macroeconomic Impacts; H - Public Economics > H1 - Structure and Scope of Government > H12 - Crisis Management; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development

References

Adolfson, M., Laséen, S., Christiano, L., Trabandt, M., Walentin, K., 2013. Ramses ii- model description. Sveriges Riskbank Occasional Paper series 12.

An, S., Shorfheide, F., 2007. Bayesian analysis of dsge models. Econometric Reviews 26, 113–172.

Baker, S.R., Bloom, N., Davis, S.J., Terry, S.J., 2020. Covid-induced economic uncertainty. NBER Working Paper Series 26983.

Baldwin, R., di Mauro, B.W., 2020. Economics in the Time of COVID-19. CEPR Press.

Beningo, P., 2009. Price stability with imperfect financial integration. Journal of Money, Credit and Banking 41, 123–149.

Blanchard, O., Khan, C., 1980. The solution to linear difference models under rational expectations. Econometrica 48, 1305–1312.

Boldrin, M., Christiano, L., Fisher, J., 2001. Habit persistence, asset returns, and the business cycle. American Economic Review 91, 149–166.

Brinca, P., Duarte, J.B., , e Castro, M.F., 2020. Is the covid-19 pandemic a supply or a demand shock? ECONOMIC SYNOPSES - St Louis FED, 31, 2486–2495.

Brooks, S., Gelman, A., 1998. General methods for monitoring convergence of iterative simulations. Journal of Computation and Graphical Statistics, 7, 434–455.

Calvo, G., 1983. Staggered prices in a utility-maximizing framework. Journal of Monetary Economics 12, 383–398.

Del Negro, M., Schorfheide, F., 2011. Bayesian macroeconometrics, in: handbook of Bayesian econometrics, T.O. (Ed.), Handbook of Bayesian Econometrics. The name of the publisher. volume 293.

Eichenbaum, M.S., Rebelo, S., Trabandt, M., 2020. The macroeconomics of epidemics. CEPR Working Paper .

Hanan, M., Lacina, B., , Mukasa, A.N., 2020. ‘not a good time’: Economic impact of covid-19 in africa. ADBG Working Paper Series 338.

Justiniano, A., Bruce, P., 2010. Monetary policy and uncertainty in an empirical small open-economy model. Journal of Applied Econometrics 25, 93–128.

McKibbin, W., Fernando, R., 2020. The global macroeconomic impacts of covid-19: Seven scenarios. CAMA Working paper 19, 45.