Losers and losses of COVID-19: a directed technical change analysis with fiscal and monetary policies

Abstract

We develop a directed technical change growth model with both public and private sectors. Due to the COVID-19 pandemic, labor productivity and R &D activity in the private sector are considered to have a negative shock. The former shock causes an immediate fall in the private premium, which can be reversed during transition dynamics towards the steady-state. Fiscal policies are materialized in direct and indirect R &D subsidies, and the monetary policies consist of relaxing cash-in-advance restrictions. An appropriate fiscal policy, together or not with monetary policy, can restore the pre-shock situation. Monetary policy is reinforced in the presence of monetary-transaction costs on consumption and of money-in-the-utility function.

Labor linkages and flow paths of industry in China

“…First, the government should establish a human resource development system to promote employment, focus on how to enhance the employment skills and entrepreneurial qualities of workers, strengthen the ability of workers to adapt to new environments and external shocks, and strengthen the reserve of “stable employment” policies [ 41 , [56] , [57] , [58] , [59] ]. Second, the government should conduct a comprehensive analysis of the issues that limit the employment of the labor population force from many angles.…”