Coronavirus Economics: the Impact of Shutting Down Meatpacking Plants

Motivated by the observed beef and livestock market impacts of coronavirus-caused meatpacking plant shutdowns, this paper constructs a theoretical model to study the effects of closures among downstream producers on both consumers and upstream producers. It analyzes the pre-shock long-run equilibrium, the effects of firm shutdowns among the downstream producers, the effects of government subsidies, and the new long-run equilibrium if the underlying cause for firm shutdowns persists.