The impact of lockdowns on macroeconomic performance: An application of epidemiology dynamics

Chia-Hui Lu

Economics Bulletin, 2024, vol. 44, issue 2, 707 - 719

Abstract: This paper introduces susceptible-exposed-infectious-recovered epidemiology dynamics with vaccines into a Ramsey-Cass-Koopmans model, which investigates the impact of lockdowns and parameters related to infectious disease on macroeconomic performance. We find that changes in parameters related to infectious diseases other than lockdown restrictions, as long as they are adverse to people's health, will reduce the number of laborers who can work and have a negative impact on output, consumption, and welfare. Although lockdown restrictions can reduce public infections, they reduce economic activities. If the government does not have any economic revitalization policies, it will take a long time to recover from the impact of lockdown restrictions that reduce output and household welfare.

Keywords: Epidemiology; infectious diseases; lockdown; welfare (search for similar items in EconPapers)
JEL-codes: E6 (search for similar items in EconPapers)
Date: 2024-06-30
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