Skip to ContentSkip to Navigation
Research Integrated Research on Energy, Environment and Society | IREES News

Countermeasures against economic crisis from COVID-19 pandemic in China: An analysis of effectiveness and trade-offs

14 October 2021

Authors: Yawen Liu, Qi Cui, Yu Liu, Jinzhu Zhang, Meifang Zhou, Tariq Ali, Lingyu Yang, Kuishuang Feng, Klaus Hubacek, Xinbei Li.

Journal: Structural Change and Economic Dynamics, Volume 59, December 2021, Pages 482-495.


The effectiveness of different countermeasures to economic crisis from the public health emergency is still inadequately understood. We establish an illustrative scenario, specifying the shocks of COVID-19 pandemic and countermeasures applying a general equilibrium model to analyze the effectiveness of countermeasures with a particular focus on trade-offs in the impacts of monetary and fiscal policies. We find that both monetary and fiscal countermeasures could effectively mitigate the economic damages to GDP and employment. However, they would also produce adverse side-effects such as an increase in consumer price by 1.05% and 0.57%, respectively, and a decline in exports by 2.61% and 1.05%, respectively. Monetary policies would exacerbate the damages to external demand by supply-side shocks of the pandemic, but they are more suitable for mitigating demand-side shocks. While fiscal policies would benefit nearly all producing sectors, monetary policies would mainly affect export-oriented manufacturing sectors negatively.

Last modified:10 November 2021 10.29 a.m.

More news

  • 12 September 2023

    Art in times of AI

    Leonardo Arriagada Beltran conducted his PhD research on the interface of computer-generated art and the constantly evolving field of Artificial Intelligence (AI). He will defend his Phd thesis on 21 September. His research offers valuable insights...

  • 28 August 2023

    Harish Vedantham and Casper van der Kooi nominated for 'Wetenschapstalent 2023'

    Harish Vedantham and Casper van der Kooi have been nominated by New Scientist for Wetenschapstalent 2023 (Science Talent 2023). This election is meant to give young scientists and their research a stage.

  • 26 July 2023

    Five promising UG researchers to top institutes abroad on Rubicon grants

    No less than five promising PhD graduates from the University of Groningen will be able to conduct research at top institutes abroad for two years thanks to the Rubicon programme organized by the Netherlands Organisation for Scientific Research...