Crisis propagation in a heterogeneous self-reflexive DSGE model

We study a self-reflexive DSGE model with heterogeneous households, aimed at characterising the impact of economic recessions on the different strata of the society. Our framework allows to analyse the combined effect of income inequalities and confidence feedback mediated by heterogeneous social networks. By varying the parameters of the model, we find different crisis typologies: loss of confidence may propagate mostly within high income households, or mostly within low income households, with a rather sharp transition between the two. We find that crises are more severe for segregated networks (where confidence feedback is essentially mediated between agents of the same social class), for which cascading contagion effects are stronger. For the same reason, larger income inequalities tend to reduce, in our model, the probability of global crises. Finally, we are able to reproduce a perhaps counter-intuitive empirical finding: in countries with higher Gini coefficients, the consumption of the lowest income households tends to drop less than that of the highest incomes in crisis times.

Domestic abuse and mental health: the amplified risks created during the pandemic

SUMMARY No recent pandemic has had such a severe socioeconomic impact as COVID-19. Significant economic uncertainty and social restrictions have led to increased levels of stress for many. There has been increased social isolation, financial stress and alcohol intake, all of which can increase domestic abuse and other forms of household abuse. Increases in abuse in the home found in other public health emergencies and economic recessions can be seen now – reported UK domestic abuse rates have increased since the start of COVID-19. This article focuses on how COVID-19 and its anticipated aftermath exacerbate the risk factors for domestic abuse in the general population and discusses clinical implications for mental health practitioners in the UK. It aims to provide a point of learning based on previous disease outbreaks and recessions, with a focus on specific factors, such as unemployment and alcohol misuse, and how these contribute to increasing incidence and severity of abuse – and more importantly, how mental health professionals can mitigate these for patients, 1 in 3 of whom are estimated to have already experienced abuse before the COVID-19 pandemic.

The Role of the Energy Sector in the Command and Control Function of Cities in Conditions of Sustainability Transitions

The largest companies that are part of the energy sector are defined by Forbes as those associated with the production of energy from nonrenewable sources and they play a very significant role in the world economy and in the generation of the command and control (C & C) function of cities. No comprehensive studies are available at the present time illustrating changes in financial performance in relation to the share of the largest firms in the energy sector in terms of their role in the generation of the C & C function. Thus, the aim of the paper is to show changes in financial performance and the impacts of energy sector companies on the C & C function of cities as well as to show spatial variances in the sector’s geography. The energy sector is developing most rapidly in Chinese cities, although it does not play a major role in the most important cities in the world via its impact on the C & C function—this may be due to rapid growth in other sectors of the economy. It is, however, very important in smaller cities. On the other hand, a large share of the energy sector involved in the development of renewable sources of energy may disturb the position of cities whose C & C function relies on energy sector companies. Thus, forecasts are needed for the sector and its impact on the command and control function of cities for the period of transition from nonrenewable sources to renewable ones. One new area of research is the formulation of methods that would allow the determination of the effects of economic recessions in the future on the financial health and C & C function impacts of the energy sector.

Children Mirror Adults for the Worse: Evidence of Suicide Rates due to Air Pollution and Recessions

[Background] Every year, more than 700,000 die due to suicide, one of the most common reasons for youth death. While many studies have revealed two main factors for suicidal behavior: impulsive suicidal behavior due to mental illness and financial stress, it is not clear what happens if individuals face deterioration of mental health and economic recession. This paper attempts to answer this question and how suicide rates are correlated with these factors.[Methods] We empirically investigate whether economic recessions and air pollution trigger suicides by examining Japan, a country with one of the highest suicide rates, from 2014 to 2021. We take advantage of the characteristics of the COVID-19 pandemic and the periods before the pandemic when both economic recessions and reductions in air pollution occurred simultaneously. Using monthly and municipal-level data, we construct a triple difference model that takes air pollution and unemployment as treatments.[Results] Our findings show that high levels of air pollution and unemployment have substantial impacts on the suicide rates of adults (22.9% in the short term) and children (42.7% in the short term, 36.0% in the long term), indicating that the increase in suicide rates among children is almost twice as high as that among adults. Our study finds that unemployment and air pollution alone are not associated with increased suicide rates but their simultaneous occurrence triggers suicides.[Conclusions] Our study urges suicide prevention, particularly among children, as an essential consideration for public health. Furthermore, our results indicate the need for the government to allocate resources to recover air quality and the economy simultaneously during a recession to reduce suicide mortality.

Impact of Public Consumption on Economic Growth

Faced with the financial crisis and global economic recessions, Africa governments have rediscovered the importance of economic policy instruments. They use it to rescue the bankrupt banks, and to make more economic activity to carry back recession. But now there's a backlash demanding that the deficits used to create the stimulus must be reduced by cutting public consumption spending on a grand scale. Hence the target of this study is to explore the role of public consumption expenditure on economic process in East African geographic region. The study will use panel ordinary least square estimation technique to attain the study objective. The study has identified consumption expenditure to be negatively associated with growth. This study recommends few funds should be channeled to public consumption programmes and sectors.

The Impact of Economic Recessions on Depression, Anxiety, and Trauma-Related Disorders and Illness Outcomes—A Scoping Review

In the wake of a global economic recession secondary to the COVID-19 pandemic, this scoping review seeks to summarize the current quantitative research on the impact of economic recessions on depression, anxiety, traumatic disorders, self-harm, and suicide. Seven research databases (PsycINFO, MEDLINE, Embase, Web of Science: Core Collection, National Library of Medicine PubMed, PubMed Central, and Google Scholar) were searched for keywords returning 3412 preliminary results published since 2008 in Organisation for Economic Coordination and Development (OECD)nations. These were screened by both authors for inclusion/exclusion criteria resulting in 127 included articles. Articles included were quantitative studies in OECD countries assessing select mental disorders (depression, anxiety, and trauma-/stress-related disorders) and illness outcomes (self-harm and suicide) during periods of economic recession. Articles were limited to publication from 2008 to 2020, available online in English, and utilizing outcome measures specific to the disorders and outcomes specified above. A significant relationship was found between periods of economic recession and increased depressive symptoms, self-harming behaviour, and suicide during and following periods of recession. Results suggest that existing models for mental health support and strategies for suicide prevention may be less effective than they are in non-recession times. It may be prudent to focus public education and medical treatments on raising awareness and access to supports for populations at higher risk, including those vulnerable to the impacts of job or income loss due to low socioeconomic status preceding the recession or high levels of financial strain, those supporting others financially, approaching retirement, and those in countries with limited social safety nets. Policy makers should be aware of the potential protective nature of unemployment safeguards and labour program investment in mitigating these negative impacts. Limited or inconclusive data were found on the relationship with traumatic disorders and symptoms of anxiety. In addition, research has focused primarily on the working-age adult population with limited data available on children, adolescents, and older adults, leaving room for further research in these areas.

Simulating the Long-Term Impacts of the COVID-19 Pandemic on the Sustainability of the Population-Economy-Environment Nexus

The COVID19 pandemic has created a massive shock, unexpectedly increasing mortality levels and generating economic recessions all around the world. In recent years, several efforts have been made to develop models that link the environment, population and the economy which may be used to estimate potential longer term effects of the pandemic. Unfortunately, many of the parameters used in these models lack appropriate empirical identification. In this study, first I estimate the parameters of “Wonderland”, a system dynamics model of the population-economy-environment nexus, and posteriorly, add external GDP and mortality shocks to the model. The estimated parameters are able to closely match world data, while future simulations point, on average and regardless of the COVID19 pandemic, to a world reaching dangerous environmental levels in the following decades, in line with consensus forecasts. On the other hand, the effects of the pandemic on the economy are highly uncertain and may last for several decades.

Hotel Room Rate Discounting During Recessionary Times: Effects by Hotel Class

Previous research regarding the costs and benefits of hotel room rate discounting during recessionary times has produced mixed results and recommendations. However, it has become clear that virtually all hotels offer discounted room rates during economic recessions, regardless of the conclusions of research studies, and that includes the recession that began in 2020. Media reports have indicated that certain rogue hotels are quick to offer discounted room rates during the early months of recessions, and therefore, operators of other hotels in their competitive set feel compelled to follow the lead, perhaps regretfully. This study found that while virtually all hotels offered discounted room rates during the recession of 2008 and 2009, there was variability in discounting during the early months of the recession. As a result, we sought to explore recessionary variability of room rate discounting, and to provide an empirical, nuanced perspective regarding the effectiveness of such discounting. Notably, we found the effectiveness of recessionary discounting varied depending on the class of hotel, with higher class establishments experiencing different outcomes from discounting than hotels categorized as relatively lower class properties.