Mobility decisions, economic dynamics and epidemic

Giorgio Fabbri, Salvatore Federico (), Davide Fiaschi and Fausto Gozzi ()
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Salvatore Federico: Università degli Studi di Genova
Fausto Gozzi: Libera Università degli Studi Sociali Guido Carli

Economic Theory, 2024, vol. 77, issue 1, No 15, 495-531

Abstract: Abstract We propose a model, which nests a susceptible-infected-recovered-deceased (SIRD) epidemic model into a dynamic macroeconomic equilibrium framework with agents’ mobility. The latter affect both their income and their probability of infecting and being infected. Strategic complementarities among individual mobility choices drive the evolution of aggregate economic activity, while infection externalities caused by individual mobility affect disease diffusion. The continuum of rational forward-looking agents coordinates on the Nash equilibrium of a discrete time, finite-state, infinite-horizon Mean Field Game. We prove the existence of an equilibrium and provide a recursive construction method for the search of an equilibrium(a), which also guides our numerical investigations. We calibrate the model by using Italian experience on COVID-19 epidemic and we discuss policy implications.

Keywords: Mean field game; Strategic complementarities; ESIRD; COVID-19 (search for similar items in EconPapers)
JEL-codes: C62 C72 C73 E1 H0 I1 (search for similar items in EconPapers)
Date: 2024
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Related works:
Working Paper: Mobility decisions, economic dynamics and epidemic (2024)
Working Paper: Mobility decisions, economic dynamics and epidemic (2023)
Working Paper: Mobility Decisions, Economic Dynamics And Epidemic (2022)
Working Paper: Mobility decisions, economic dynamics and Epidemic (2022)
Working Paper: Mobilty Decisions, Economic Dynamics and Epidemic (2021)
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DOI: 10.1007/s00199-023-01485-1

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