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Positive and Normative Issues of Economic Growth with Infectious Disease

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  • Doriana Delfino
  • Peter J. Simmons

Abstract

This paper uses a variant of the Lotka-Volterra system explaining the dynamic interaction between populations of infected and healthy individuals in which the demographic and epidemiological parameters (the net healthy birth rate, the death rate of the infected and the infection rate) are functions of economic variables and some simple economic growth models to examine deterministic growth paths of the system with an exogenous savings rate. Demographic-epidemiological parameters depend on productive capital which combined with healthy workers produces output. We find that there are generally multiple steady states. The system usually converges to a steady state in which the economy moderates the disease. If capital accumulation is set optimally to maximise welfare then there may be multiple steady states and optimal growth paths generally display four dimensional saddle point properties. Extensions of the framework to allow for density dependent infection, recovery from the disease and alternative social welfare functions are analysed.

Suggested Citation

  • Doriana Delfino & Peter J. Simmons, "undated". "Positive and Normative Issues of Economic Growth with Infectious Disease," Discussion Papers 00/48, Department of Economics, University of York.
    • Handle: RePEc:yor:yorken:00/48
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    File URL: https://www.york.ac.uk/media/economics/documents/discussionpapers/2000/0048.pdf
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    References listed on IDEAS

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    Cited by:

    1. Ian M. Trotter & Lu'is A. C. Schmidt & Bruno C. M. Pinto & Andrezza L. Batista & J'essica Pellenz & Maritza Isidro & Aline Rodrigues & Attawan G. S. Suela & Loredany Rodrigues, 2020. "COVID-19 and Global Economic Growth: Policy Simulations with a Pandemic-Enabled Neoclassical Growth Model," Papers 2005.13722, arXiv.org, revised Jun 2020.
    2. Stefano Bosi & David Desmarchelier, 2018. "Pollution and infectious diseases," International Journal of Economic Theory, The International Society for Economic Theory, vol. 14(4), pages 351-372, December.
    3. Aditya Goenka & Lin Liu, 2012. "Infectious diseases and endogenous fluctuations," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(1), pages 125-149, May.
    4. Aditya Goenka & Lin Liu, 2020. "Infectious diseases, human capital and economic growth," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 70(1), pages 1-47, July.
    5. d’Albis, Hippolyte & Augeraud-Véron, Emmanuelle, 2021. "Optimal prevention and elimination of infectious diseases," Journal of Mathematical Economics, Elsevier, vol. 93(C).
    6. Goenka, Aditya & Liu, Lin & Nguyen, Manh-Hung, 2014. "Infectious diseases and economic growth," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 34-53.

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    More about this item

    Keywords

    economic growth; infectious disease; dynamic optimal control.;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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