Infected People,Epidemic And The Effects Of Anti-epidemic Measures

The COVID-19 epidemic that broke out at the end of 2019,while threatening the safety of all human lives,caused a huge negative impact on the world economy.The specific impact of the epidemic on the economy,how to deal with the short-run economic recession caused by the epidemic,and the economic recovery in the later stage of the epidemic have become hot topics for economist to study.Using methods of infectious disease economics,this article studies the impact of the COVID-19 epidemic on the real economy and financial sectors from the perspective of the interaction between the change in the number of infected people and the economic behavior of rational people,and the effect of government anti-epidemic measures.I suppose that this paper can provide theoretical support for epidemic prevention and controlFirst,this article first conducts a theoretical study on the impact of the epidemic on the real economy.The author expands on the SIR-Macro model established by Eichenbaum et al.(2020),introduces the population of patients in the incubation period into the mode,and establishes the SEIR-Macro theoretical model to describe the development process of the epidemic and how the increase in the number of infections affects the economy of rational people decision making.After establishing the model,I used China’s actual data to calibrate the key parameters in the model to study the impact of the epidemic on macroeconomic fundamentals,and compared the estimation effects of the SEIR model and the SEIR-Macro model.Then,I used the model to study the impact of the government’s lockdown policy and mandatory quarantine measures on the development of the epidemic and the real economy sector.Finally,I describe the impact of the epidemic on the financial sector based on actual data,and further explore the role of government anti-epidemic measures in enhancing investor confidence and stabilizing the financial market.The main conclusions drawn are as follows.First,the increase in the number of infected people increases the risk of normal people contracting the disease.Therefore,susceptible people will actively reduce consumption and labor to reduce the probability of contact with patients.he result is that the number of infections and deaths estimated by the SEIR-Macro model is less than that of the SEIR model,but the economic recession in the short term is more serious.Second,the lockdown policy can effectively reduce the number of infections and deaths caused by the epidemic.But the cost is a more serious short-term economic recession.Third,due to the lack of effective means to identify patients with incubation period,although mandatory isolation measure for overt patients cannot immediately end the epidemic,it can significantly curb the spread of the epidemic,shorten the duration of the epidemic and ease the impact on the economy.Fourth,the epidemic will increase the liquidity risk and credit default risk of the financial sector,cause investor panic and aggravate the volatility of financial asset prices.The government’s anti-epidemic measures can provide investors with effective information to predict the development of the epidemic,so that enhancing investor confidence and making a positive impact on stabilizing the financial market and economic recovery.