Quantitative Analysis of the COVID-19 Pandemic Shock to Household Consumption in China

• 作者: Lei Ning Yuqin Wang
• 来源期刊: 中国经济学前沿
• 年，卷（期）: 2020,（3）
• 所属期刊栏目: Research Article
• 页码范围: 355-379
• 页数: 25页
• 语种: 英文
• DOI: 10.3868/s060-011-020-0015-4

摘要

We study the impact of the COVID-19 pandemic shock on household consumption in China.Using household survey data,we find that the proportion of liquidity-constrained households increases quickly,but the constraint levels vary across distinct groups.We build a heterogeneous agent life cycle incomplete market model to analyze the long-run and short-run effects of the pandemic shock.The quantitative results reveal a slow recovery of consumption due to three reasons: hiking unemployment rate,declining labor productivity,and worsening income stability.The hiking unemployment rate plays the key role in households' consumption reduction since it simultaneously leads to a negative income effect and upsurging precautionary saving motives.Our paper highlights the importance of maintaining a stable labor market for faster recovery.