The impact of a major outbreaks of epidemics on economic development

Abstract

When studying the impact of an epidemic on the economy, previous studies have mainly examined the impact of the pandemic as an overall event. The fact that there are different stages in the development of an epidemic, such as the beginning, the full-blown outbreak and then the end, and that the extent of the impact on the economy can vary significantly depending on the stage of the epidemic, has been less considered in the existing literature. While analysing the impact of the epidemic on the time series, the following moments can be examined using an ARIMA – GARCH stage-specific intervention model. In this paper, we use such pandemics as SARS in 2003, Influenza A (H1N1) in 2009 and COVID-19 in 2020 as examples, and apply the ARIMA – GARCH staged intervention model to analyse the macroeconomic impact of these three sudden large-scale epidemics, and on this basis we summarise the pattern of the impact of the epidemics on the macroeconomy, so as to provide reference for the weel-informed decision-making.