Simulations of Policy Responses and Interventions to Promote Inclusive Adaptation to and Recovery from the COVID-19 Crisis in Zimbabwe

Abstract

We extend the broader macro-micro modelling literature on COVID-19 shocks by presenting new evidence regarding estimated effects of mitigation and recovery policies on macroeconomic and distributional effects in Zimbabwe. A novel feature in our model is an emphasis on gender-disaggregated labor markets and distribution within a computable general equilibrium model using a top-down approach. The main findings are that the effects of the pandemic under both mild and severe scenarios were harsh on the economy and worsened poverty and inequality. Poor and vulnerable populations, and women in particular, were most affected through low earnings and savings, limited coping mechanisms, and employment in exposed sectors. Responses in the form of mitigation and short-term economic stimulus were effective in the short run but became unsustainable in the longer term, highlighting the short-term versus long-term dilemma faced by the Zimbabwean government when contemplating responses to COVID-19.