 A simple macro‐model of COVID‐19 with special reference to IndiaMetroeconomica, 2021, vol. 72, issue 4, 650-678 Abstract: Motivated by the prevailing severe situation in India, we extend the SIR(S) model of infectious diseases to incorporate demand dynamics and its interaction with COVID‐19 spread. We argue that, on one hand, the spread of COVID‐19 creates panic among consumers and firms and negatively affects economic activity. On the other hand, economic activity intensifies the spread of the infection. Initially assuming that recovered individuals do not develop antibodies and become susceptible again, we capture the interaction between economic activity and the spread of the disease in a two‐dimensional dynamical system. We show that a large fiscal expansion combined with measures to boost community health and improve the health sector's capacity to provide critical care can simultaneously improve the economy and control the spread of the disease. Finally, assuming that only a fraction of recovered individuals become susceptible to contracting the diseases again, we obtain richer dynamics in a three‐dimensional dynamical system. This paper also highlights the important role of infection rates and the recovery rate in determining the uniqueness and the stability properties of steady state. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:metroe:v:72:y:2021:i:4:p:650-678 Ordering information: This journal article can be ordered from Access Statistics for this article Metroeconomica is currently edited by Heinz D. Kurz and Neri Salvadori More articles in Metroeconomica from Wiley Blackwell |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.