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Validating a dynamic input-output model for the propagation of supply and demand shocks during the COVID-19 pandemic in Belgium

Tijs W. Alleman, Koen Schoors, Jan M. Baetens

arXiv 25 May 2023 · General Economics · 2 citations (OpenAlex)

arXiv:2305.16377 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This work validates a dynamic production network model, used to quantify the impact of economic shocks caused by COVID-19 in the UK, using data for Belgium. Because the model was published early during the 2020 COVID-19 pandemic, it relied on several assumptions regarding the magnitude of the observed economic shocks, for which more accurate data have become available in the meantime. We refined the propagated shocks to align with observed data collected during the pandemic and calibrated some less well-informed parameters using 115 economic time series. The refined model effectively captures the evolution of GDP, revenue, and employment during the COVID-19 pandemic in Belgium at both individual economic activity and aggregate levels. However, the reduction in business-to-business demand is overestimated, revealing structural shortcomings in accounting for businesses' motivations to sustain trade despite the pandemic's induced shocks. We confirm that the relaxation of the stringent Leontief production function by a survey on the criticality of inputs significantly improved the model's accuracy. However, despite a large dataset, distinguishing between varying degrees of relaxation proved challenging. Overall, this work demonstrates the model's validity in assessing the impact of economic shocks caused by an epidemic in Belgium.

Citation extraction

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appendix boundary found by appendix_command · 83% of the source is main text. Read the extracted text to check this.

Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1botherref US Congressional Budget Office: Potential Influenza Pandem… (2023) botherref1.00053100%
2barticle Pichler, A., Pangallo, M., del Rio-Chanona, R.M., Lafond, F… (2022) )0.97628593%
3botherref National Bank of Belgium: ERMG Surveys. Available at https… (2021) botherref0.96510490%
4barticle del Rio-Chanona, R.M., Mealy, P., Pichler, A., Lafond, F.,… (2020) )0.92843100%
5botherref Federal Planning Bureau: Input-Output Tables (2018) botherref0.6443267%
6botherref National Bank of Belgium Online Statistics: Foreign trade… (2023) botherref0.64422100%
7botherref Organisation for Economic Co-operation and Development: In… (2023) botherref0.64422100%
8botherref Muellbauer, J.: The coronavirus pandemic and US consumptio… (2020) botherref0.58531100%
9botherref NBB.Stat: National Bank of Belgium Statistics. Available a… (2023) https://stat.nbb.be/ botherref0.51121100%
10botherref National Bank of Belgium: Impact van de COVID-19-crisis op… (2021) botherref0.51121100%

Showing the top 10 of 35 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Assessing the impact of forced and voluntary behavioral changes on economic-epidemiological co-dynamics0.55082