COVID-19 Pandemic, Sustainability of Macroeconomy, and Choice of Monetary Policy Targets: A NK-DSGE Analysis Based on China

This paper studies the impact of COVID-19 pandemic on sustainability Chinese economic growth, government debt, and income inequality by constructing a new Keynesian dynamic stochastic general equilibrium (NK-DSGE) model. The choice monetary policy targets is then analyzed to hedge pandemic. We find that: (1) aggregate demand labor shocks caused posed serious challenges sustainable development economy increased social inequality; (2) when mainly reflected in recession demand, should pay more attention target price stability; (3) decline focus growth; (4) has significant both which focuses growth conducive minimizing welfare losses. Targeted implications, such as selecting according different manifestations placing emphasis tools stimulate consumption, alleviate unemployment, inequality, are suggested improve economy.