Environment, public debt and epidemics

Marion Davin (), Mouez Fodha and Thomas Seegmuller
Additional contact information
Marion Davin: CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier

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Abstract: We study whether fiscal policies, especially public debt, can help to curb the macroeconomic and health consequences of epidemics. Our approach is based on three main features: we introduce the dynamics of epidemics in an overlapping generations model to take into account that old people are more vulnerable; people are more easily infected when pollution is high; public spending in health care and public debt can be used to tackle the effects of epidemics. We show that fiscal policies can promote convergence to a stable disease-free steady state. When public policies are not able to permanently eradicate the epidemic, public debt, and income transfers could reduce the number of infected people and increase capital and GDP per capita. As a prerequisite, pollution intensity should not be too high. Finally, we define a household subsidy policy that eliminates income and welfare inequalities between healthy and infected individuals.

Keywords: Epidemics; pollution; overlapping generations; public debt (search for similar items in EconPapers)
Date: 2023-12
New Economics Papers: this item is included in nep-dge, nep-env, nep-hea and nep-mac
Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-03555726v1
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Citations: View citations in EconPapers (7)

Published in Journal of Public Economic Theory, 2023, 25 (6), pp.1270-1303. ⟨10.1111/jpet.12566⟩

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Related works:
Journal Article: Environment, public debt, and epidemics (2023)
Working Paper: Environment, public debt and epidemics (2023)
Working Paper: Environment, public debt and epidemics (2021)
Working Paper: Environment, public debt and epidemics (2021)
Working Paper: Environment, public debt and epidemics (2021)
Working Paper: Environment, public debt and epidemics (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:hal-03555726

DOI: 10.1111/jpet.12566

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