Pandemic effects in the Solow growth model.
Bull Econ Res
; 2022 Oct 17.
Article
in English
| MEDLINE | ID: covidwho-2082702
ABSTRACT
We show how diseases can affect economic growth in a Solow growth model, with population growth and no technical progress, but modified to include a saving rate that depends on the individual health status. We successively insert this model into the SIS (susceptible-infected-susceptible) and SIR (susceptible-infected-recovered) models of disease spreading. In these two models, the spread of the infection proceeds according to the so-called basic reproductive number. This number determines in which of the two possible equilibria, the disease-free or the pandemic equilibrium, the economy ends. We show that output per capita is always lower in the pandemic steady state, which implies a contraction in the economy's production possibilities frontier.
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Collection:
International databases
Database:
MEDLINE
Type of study:
Experimental Studies
Language:
English
Year:
2022
Document Type:
Article
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