We simulate the fiscal stimulus packages set up by the German government to allevi-ate the costs of the COVID-19 pandemic in a dynamic New Keynesian multi-sectorgeneral equilibrium model. We find that, cumulated over 2020-2022, output lossesrelative to steady state can be reduced by more than 4...

This paper considers different approaches to modelling the economic impact of the COVID-19 pandemic/lockdown shocks. We review different modelling strategies and argue that, given the nature of the bottom-up recession caused by the pandemic/lockdowns, simulation models of the shocks should be...