Consumption-contagion dynamics during epidemic with voluntary social distancing

Pakasa Bary and Rani Setyodewanti ()
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Rani Setyodewanti: International Monetary Fund

Economics Bulletin, 2021, vol. 41, issue 2, 696-701

Abstract: This paper discusses causal dynamics between epidemic and consumption by incorporating different consumption behavior among those susceptible, infected and recovered from the disease. This paper finds that endogenous voluntary social distancing induces recession in the short-term, but limits the permanent output loss in the medium-term. It slows contagion, lowers the peak of active cases, reduces the total infections and deaths.

Keywords: epidemic; pandemic; COVID-19; recession; consumption; SIR model (search for similar items in EconPapers)
JEL-codes: E2 I1 (search for similar items in EconPapers)
Date: 2021-04-09
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