Abstract
This paper studies an optimal growth model where health expenditures (alternatively lockdowns) can be made to reduce infectivity of the disease when there is an infectious disease with SIR dynamics and infections can cause disease related mortality. We study implications of two different SIR models - with early mortality and with late mortality from the disease - on health outcomes, optimal response and on economic outcomes in equilibrium. We characterize the steady states and show how these vary when varying mortality. The outcomes are sensitive to the specification of the epidemiology model. We also study sufficiency conditions and provide the first results in economic models with SIR dynamics with and without disease related mortality - a class of models which are non-convex and have endogenous discounting so that no existing results are applicable.
Keywords
Infectious diseases, Covid-19, SIR model, mortality, sufficiency conditions, economic growth, lockdown, prevention, health expenditure.;
JEL codes
- E13: Neoclassical
- E22: Capital • Investment • Capacity
- D15:
- D50: General
- D63: Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- I10: General
- I18: Government Policy • Regulation • Public Health
- O41: One, Two, and Multisector Growth Models
- C61: Optimization Techniques • Programming Models • Dynamic Analysis
Replaced by
Aditya Goenka, Lin Liu, and Manh-Hung Nguyen, “SIR Economic Epidemiological Models with Disease Induced Mortality”, Journal of Mathematical Economics, vol. 93, n. 102476, March 2021.
Reference
Aditya Goenka, Lin Liu, and Manh-Hung Nguyen, “SIR Economic Epidemiological Models with Disease Induced Mortality”, TSE Working Paper, n. 20-1150, October 2020, revised January 2021.
See also
Published in
TSE Working Paper, n. 20-1150, October 2020, revised January 2021