In terms of drops in real Gross Domestic Product (GDP) and private consumption, the early phase of the Covid-19 pandemic can be categorized as the worst recession period in the US and Europe since the Great Depression of 1929.

While the global economy was hugely affected in a generalized manner, the impact on different economies’ sectors and countries were uneven. An explicit example can be spotted when looking at services sectors relying on face-to-face interactions (e.g., restaurants) versus online deliveries of goods and services.

The authors propose different quantitative economic models to measure how the distinct aspects of the Covid-19 pandemic have impacted the increase of prices over the period comprising the collapse and recovery phases of the global economy, that is, from 2019-Q4 to 2021-Q4. The resolution of these complex models involves the optimization of nonlinear problems which is achieved with the help of Artelys Knitro.

Thanks to Artelys Knitro, the authors are capable to conduct an analysis on the persistent inflation that the Covid-19 pandemic has generated. In addition, Artelys Knitro has the ability to deal with complementarity constraints which are valuable tools when dealing with economy models and applications.

The authors have asked Artelys to mention that this study has been undertaken without any financial support from Artelys.