Coronavirus Economics: The Impact of Shutting Down Meatpacking Plants
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Date
2020-06-25
Journal Title
Journal ISSN
Volume Title
Publisher
Private Enterprise Research Center, Texas A&M University
Abstract
Motivated by the observed beef and livestock market impacts of coronavirus-caused meatpacking plant shutdowns, this paper constructs a theoretical model to study the effects of closures among downstream producers on both consumers and upstream producers. It analyzes the pre-shock long-run equilibrium, the effects of firm shutdowns among the downstream producers, the effects of government subsidies, and the new long-run equilibrium if the underlying cause for firm shutdowns persists.
Description
Macroeconomics
Keywords
coronavirus; business shutdown; competitive equilibrium; subsidy; social optimality, Macroeconomics