Coronavirus, Population and the Economy: A Long-Term Perspective

Abstract

This article attempts to construct an extremely rudimentary framework to argue that the long-term losses from the pandemic shock are likely to far exceed the short-term one. In the simple structure presented here, output depends on labour force, efficiency that is determined by past nutrition levels and capital accumulated from the past. The immediate effect of the pandemic is to lower the effective labour size, principally due to lockdowns to prevent or delay the spread of the pandemic. The other two factors cannot be affected. However, the decline in present output is likely to lower both the efficiency of labour and the future capital along with the labour supply in the future, thereby causing a greater impact on future output