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Environment, public debt and epidemics

Marion Davin, Mouez Fodha () and Thomas Seegmuller ()
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Marion Davin: CEE-M - Centre d'Economie de l'Environnement - Montpellier - UMR 5211 - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Thomas Seegmuller: AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: We study whether fiscal policies, especially public debt, can help to curb the macroeconomic and health consequences of epidemics. Our approach is based on three main features: we introduce the dynamics of epidemics in an overlapping generations model to take into account that old people are more vulnerable; people are more easily infected when pollution is high; public spending and public debt can be used to tackle the effects of epidemics. We show that fiscal policies can promote the convergence to a stable steady state with no epidemics. When public policies are not able to permanently eradicate the epidemic, public debt and income transfers could reduce the number of infected people and increase capital and GDP per capita. As a prerequisite, pollution intensity should not be too high. Finally, we define a household subsidy policy which eliminates income and welfare inequalities between healthy and infected individuals.

Keywords: overlapping generations; public debt; pollution; epidemics (search for similar items in EconPapers)
Date: 2021-05-07
New Economics Papers: this item is included in nep-dge and nep-env
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-03222251v2
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Related works:
Working Paper: Environment, public debt and epidemics (2021) Downloads
Working Paper: Environment, public debt and epidemics (2021) Downloads
Working Paper: Environment, public debt and epidemics (2021) Downloads
Working Paper: Environment, public debt and epidemics (2021) Downloads
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