A Method to Analyze the Sectoral Impact of Fiscal Support for COVID-19 Affected Economies: The Case of Oceania
In this paper, we apply the method of computable general equilibrium (CGE) modeling in economics to ascertain how fiscal support measures such as wage subsidies, small business loans, and finance guarantee schemes have impacted at an economy-wide and sectoral level for 8 COVID-19 affected economies in Oceania. We model our scenarios based on IMF World economic outlook projections, combined with the fiscal stimulus packages offered to counter this global health pandemic's recessionary effect. Our study confirms that the adverse impact of COVID-19 on output is cushioned through a large fiscal stimulus package wherever offered. This package would still be inadequate to avoid unemployment and job losses in tourism and education services in Oceania, with continued support essential for their survival in 2021. • The approach entails steps (1) to (3), as outlined in the paper.
• Future researchers will find this method useful in evaluating the adverse impact of not only COVID-19 but any other external shocks to the economy, either directly or indirectly, that involves fiscal support mechanisms.