COVID-19 and Long-Term Economic Growth |
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Authors: | Jinji Hao Harry Gregg Yao Yao |
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Institution: | 1. School of Economics and Finance, Victoria University of Wellington, Wellington, 6011 New Zealand;2. FNZ, Wellington, 6011 New Zealand |
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Abstract: | This article investigates the impact of the COVID-19 pandemic on the long-term economic growth of South Africa. We embed an epidemiological model in a modified Solow–Swan model and explore various channels such as morbidity, mortality, unemployment, loss of school days and capital accumulation. We demonstrate that COVID-19 will lower the average annual growth rate of GDP per capita of South Africa by 0.07 percentage points in the next four decades, a 25 per cent decline relative to the no-COVID benchmark. We show that human capital losses due to school closures account for more than half of the economic slowdown. |
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