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.
Infectious diseases, Covid-19, SIR model, mortality, suﬃciency conditions, economic growth, lockdown, prevention, health expenditure.;
- E13: Neoclassical
- E22: Capital • Investment • Capacity
- 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
Aditya Goenka, Lin Liu, and Manh-Hung Nguyen, “SIR Economic Epidemiological Models with Disease Induced Mortality”, Journal of Mathematical Economics, 2021, forthcoming.
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.
TSE Working Paper, n. 20-1150, October 2020, revised January 2021