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Searching for a "Golden Rule" of Economic Regulation of an Infectious Disease

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  • Eirik S. Amundsen

Abstract

This paper investigates whether a “Golden Rule” of regulation of an infectious disease may be elicited that balances the economic control and disease costs when the arrival of a future vaccine or a cure is uncertain. Formulating an optimal control problem applied to standard compartment models of infection, an optimality rule is derived. This rule is more complex than other similar Golden Rules related to optimal economic growth or extraction of natural resources. The paper contains interpretation of the derived rule and numeric examples of how the rule functions under the compartment models (i.e., the SI, the SIS, and the SIR models).

Suggested Citation

  • Eirik S. Amundsen, 2022. "Searching for a "Golden Rule" of Economic Regulation of an Infectious Disease," CESifo Working Paper Series 9607, CESifo.
    • Handle: RePEc:ces:ceswps:_9607
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    References listed on IDEAS

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    7. Farboodi, Maryam & Jarosch, Gregor & Shimer, Robert, 2021. "Internal and external effects of social distancing in a pandemic," Journal of Economic Theory, Elsevier, vol. 196(C).
    8. Harold Hotelling, 1931. "The Economics of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, vol. 39(2), pages 137-137.
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    More about this item

    Keywords

    infectious disease; economic regulation; Golden Rule; compartment models;
    All these keywords.

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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