We study the e¤ects of COVID-19, and the ensuing lockdown and …scal policies, on the welfare of di¤erent age-groups within a life-cycle macroeconomic scheme, adapted from Gertler (1999), where the pandemic is represented as a shock to the mortality rate. We obtain two main results. First, we can show that lockdown policies have a negative impact on the dynamics of economic welfare of younger agents relative to that of older agents, thus providing analytical support to the idea that the management of the COVID-19 pandemic through lockdown policies has hit mainly the young generations. Second, we show that expansionary …scal policies aimed at supporting income after the lockdown a¤ect the relative welfare index of age-groups mainly through the repayment scheme of the consequent public debt; the more the repayment scheme entails a postponement of the debt repayment, the more older agents are favored (in relative terms).

COVID-19 epidemic and generational welfare

Marchetti, Enrico
;
Ciccarone, Giuseppe;
2021

Abstract

We study the e¤ects of COVID-19, and the ensuing lockdown and …scal policies, on the welfare of di¤erent age-groups within a life-cycle macroeconomic scheme, adapted from Gertler (1999), where the pandemic is represented as a shock to the mortality rate. We obtain two main results. First, we can show that lockdown policies have a negative impact on the dynamics of economic welfare of younger agents relative to that of older agents, thus providing analytical support to the idea that the management of the COVID-19 pandemic through lockdown policies has hit mainly the young generations. Second, we show that expansionary …scal policies aimed at supporting income after the lockdown a¤ect the relative welfare index of age-groups mainly through the repayment scheme of the consequent public debt; the more the repayment scheme entails a postponement of the debt repayment, the more older agents are favored (in relative terms).
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11367/94391
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