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Searching for a “Golden Rule” of economic regulation of an infectious disease

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  • Eirik S. Amundsen

    (Department of Economics, University of Bergen
    Department of Food and Resource Economics, University of Copenhagen)

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, 2021. "Searching for a “Golden Rule” of economic regulation of an infectious disease," IFRO Working Paper 2021/08, University of Copenhagen, Department of Food and Resource Economics.
    • Handle: RePEc:foi:wpaper:2021_08
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    File URL: http://okonomi.foi.dk/workingpapers/WPpdf/WP2021/IFRO_WP_2021_08.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

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

    JEL classification:

    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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