Economic growth, employment, and income distribution in times of pandemic: A general equilibrium analysis for Colombia

This paper quantifies the effects of the COVID-19 pandemic on the productive activity in Colombia and the measures adopted to contain, mitigate, and recover from it. Additionally, distributional effects are studied, taking into consideration different types of households in order to analyse their impact on the most vulnerable sectors of the economy. For this purpose, a CGE model that summarises the behaviour of the Colombian economy and allows for simulation of the COVID-19 shocks is constructed. It found a growth of 4.6% in 2021, which would be insufficient for reaching pre-pandemic GDP levels. The social effects would be devastating in terms of poverty, which after rising by about eight percentage points during 2020, could continue increasing in 2021 due to the partial recovery of labour markets.