An analytical economic dynamic model considering unemployment and incorporating the SIR approach

João Gabriel de Araujo Oliveira, Geraldo Sandoval Góes and Joanilio Rodolpho Teixeira

Chapter 9 in Income Distribution, Economic Growth and Unemployment, 2025, pp 187-215 from Edward Elgar Publishing

Abstract: This chapter proposes three new approaches to modeling economic growth and employment. First, we develop a model where capacity utilization is determined by the difference between the population and capital stock. Second, we distinguish between natural unemployment and unemployment caused by external factors. Third, we incorporate the SIR model to analyze how the pandemic impacts employment and growth. We demonstrate stable conditions for all three cases and conduct numerical simulations to assess their economic efficiency. The first model behaves as expected in a post-Keynesian framework: unemployment is possible in the short and medium term, but full employment is achieved in the long run. However, in the second case, permanent involuntary unemployment is likely. The third model shows that full employment will be achieved if and only if the pandemic is the sole external factor causing unemployment.

Keywords: Pandemic; Income Distribution; Growth; Dynamics (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035342556
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