Positive and Normative Issues of Economic Growth with Infectious Disease

Doriana Delfino and Peter Simmons

Discussion Papers from Department of Economics, University of York

Abstract: This paper uses a variant of the Lotka-Volterra system explaining the dynamic interaction between populations of infected and healthy individuals in which the demographic and epidemiological parameters (the net healthy birth rate, the death rate of the infected and the infection rate) are functions of economic variables and some simple economic growth models to examine deterministic growth paths of the system with an exogenous savings rate. Demographic-epidemiological parameters depend on productive capital which combined with healthy workers produces output. We find that there are generally multiple steady states. The system usually converges to a steady state in which the economy moderates the disease. If capital accumulation is set optimally to maximise welfare then there may be multiple steady states and optimal growth paths generally display four dimensional saddle point properties. Extensions of the framework to allow for density dependent infection, recovery from the disease and alternative social welfare functions are analysed.

Keywords: economic growth; infectious disease; dynamic optimal control. (search for similar items in EconPapers)
JEL-codes: I10 I18 O11 O41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev
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