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The macroeconomics of the COVID-19 epidemic: the case of China

Published online by Cambridge University Press:  23 December 2025

Tao Peng ,
Ying Tung Chan  and
Raoul Minetti
Tao Peng
Affiliation:
Southwestern University of Finance and Economics, Chengdu, China
Ying Tung Chan
Affiliation:
Beijing Normal University, Zhuhai, China
Raoul Minetti*
Affiliation:
Michigan State University, East Lansing, MI, USA
*
Corresponding author: Raoul Minetti; Email: minetti@msu.edu
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Abstract

This paper studies the impact of the COVID-19 epidemic on economic and health outcomes in China from January 20 to September 28, 2020. We first document China’s containment policies and present empirical evidence on the role of the online economy. We then use a SIR-macro model to study the macroeconomic and health outcomes of the epidemic. The model can generate infection and death dynamics broadly consistent with the data and the U-shaped recovery of the Chinese economy at the weekly frequency. The analysis reveals that, in addition to the containment policies, the development of the online economy (both online consumption and remote work) plays a critical role in fighting an epidemic.

Keywords

COVID-19online economycontainment policiesE0E65H12I1

Information

Type
Research Article
Information
Macroeconomic Dynamics , Volume 30 , 2026 , e1
Copyright
© The Author(s), 2025. Published by Cambridge University Press

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