Belief-driven dynamics in a behavioral SEIRD macroeconomic model with sceptics

Christian R. Proaño, Jiri Kukacka and Tomasz Makarewicz

Journal of Economic Behavior & Organization, 2024, vol. 217, issue C, 312-333

Abstract: The reluctance of a non-trivial fraction of the population to adhere to social distancing measures – and even to get vaccinated – during the COVID-19 pandemic represented a challenge for imposed public health policies in many countries around the world. Against this background we study the impact of boundedly rational perceptions for the dynamics of epidemics such as the COVID-19 pandemic in a standard epidemic model extended by a stylized macroeconomic dimension similar to Atkeson et al. (2021). We illustrate through which channels misperceptions or even “scepticism” concerning the infectiousness of the disease or its mortality rate may undermine the effectiveness of lockdowns and other public health policies in the long-run.

Keywords: Endogenous cycles; COVID-19 pandemic; Bounded rationality; Heterogenous expectations (search for similar items in EconPapers)
JEL-codes: E3 E7 I1 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:217:y:2024:i:c:p:312-333

DOI: 10.1016/j.jebo.2023.11.011

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