Modeling and Simulation on the COVID-19 Infection: Preliminary Result

Discussion Papers

No.816

by Tsubasa Shibata and Hiroyuki Kosaka

March 2021

ABSTRACT

In this study, we aim to develop the extended SIR model of epidemiology linked with the high-frequency multi-sector econometric model in order to investigate the impact of epidemic dynamics on the Japanese economy in Japan. Our approach features three aspects. The first one is that as for our epidemic model, we develop two time-varying parameters, namely an infection rate and a recovery/remote rate, which are crucial parameters in the conventional SIR model. Besides, these parameters are endogenized in our extended SIR model linked to the multi-sector econometric model, enabling to better understand the mechanism that infection and recovery rates increase or decrease as well as capture the changes of the epidemic behavior timely. The third one is that we construct the monthly econometric model that is composed of multi-sector industries. Our approach allows us to timely and exactly grasp the status of Japanese economy in respond to COVID-19 epidemic.

Keywords: COVID-19, SIR, Monthly Macro Econometric Model

JEL classification: F15, O14, O30

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